Can You Take Loan Against Your Mutual Fund?

What is Loan Against Mutual Funds (LAMF)? LAMF allows investors to borrow money by pledging their mutual fund units as collateral with banks or NBFCs.

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Eligible Mutual Fund Types for Loan Both equity and debt mutual funds are generally accepted. However, lenders may prefer liquid and debt-oriented schemes for safety.

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How Much Loan Can You Get? Typically, lenders offer up to 50-70% of the mutual fund’s current market value, depending on fund type and risk.

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Loan Process and Disbursement Investors must pledge units digitally or physically. Once verified, the approved loan amount gets disbursed quickly into your account.

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Key Advantages and Risks LAMF offers quick liquidity without selling investments, but market value fluctuations may trigger margin calls from lenders.

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