A Loan Against Mutual Fund (LAMF) is a convenient way to access funds without redeeming your mutual fund investments. Instead of selling your units, you can use eligible mutual fund holdings as collateral to obtain a loan from a financial institution.

This facility can help you meet short-term financial requirements, such as business needs, education expenses, medical emergencies, or other planned expenses, while allowing your investments to remain invested.

The loan amount generally depends on the type and value of your mutual fund holdings and the lender’s applicable terms and conditions. Eligible mutual fund schemes and the loan-to-value ratio may vary between lenders. Interest is charged on the amount utilised, as per the applicable loan agreement.

One of the key advantages is that you may continue to benefit from the potential growth of your mutual fund investments while accessing liquidity when required. However, it is important to understand the applicable interest rate, repayment terms, charges, and risks before opting for such a facility.

We can help you understand how a Loan Against Mutual Fund works and guide you through the available options, subject to lender eligibility and approval.