Loan Against MF
How Does Loan Against Mutual Funds Work?
Loan Against Mutual Funds: A Smart Financing Option
A Loan Against Mutual Funds (LAMF) is a secured loan where you pledge your mutual fund units as collateral to secure financing. Unlike traditional loans, where you might need to liquidate your assets, a Loan Against Mutual Funds allows you to retain ownership of your investments. This means your mutual funds continue to grow in value while you gain access to the liquidity you need, providing the best of both worlds.
You can take a loan against equity mutual funds, debt funds, or hybrid funds, depending on the lender’s eligibility criteria and your financial situation. The loan amount is typically a percentage of the market value of the mutual funds you pledge, ranging from 50% to 90%.
Benefits of Loan Against Mutual Funds
One of the key advantages of a Loan Against Mutual Funds is that it provides instant liquidity without the need to sell your mutual funds.