A financial crunch necessitates fundraising. 

Out of many funding tools available, a loan against mutual funds is an attractive option.  

What is a loan against Mutual Funds?

Loan against mutual funds is a secured type of loan where you pledge your mutual fund units as collateral as it is a secured loan. It comes with a lower interest rate as compared to other non-secured loans.  

Eligibility 

• You are an Indian national
• 21 years or more in age
• can produce age, residential and income proof
• Income tax return statements

How to apply for this loan?

You can select from an online or offline mode of application. Your mutual fund units will stay with the lender as security until you repay the whole loan amount. You need to sign a lien document, which gives rights to the lender to sell off your units if you fail to repay the loan. The loan amount will depend on the market value of the mutual fund units. 

 Salient features of loan against Mutual funds

   Various functions make this loan an ideal choice in an emergency.

 They are:

• Online application, quick approval and fast disbursement of loan funds
• You can get 50% – 60% of the market value of the mutual fund as the loan amount
• As it is a secured loan, the interest rate is lower
• No penalty for foreclosure of the loan

 Loan against mutual funds is an ideal funding tool in emergency financial need. It is easy to avail and swift in disbursement.

Additional Read: How to take a loan against mutual fund investments?