Smart Liquidity: A Complete Guide to Loan Against Mutual Funds

Need emergency cash but don't want to break your long-term mutual fund SIPs? There's a highly intelligent, premium solution that most retail investors overlook: Loan Against Mutual Funds (LAMF). This financial tool offers the perfect blend of liquidity and wealth preservation.

What is a Loan Against Mutual Funds?

A Loan Against Mutual Funds is a secured borrowing option where you pledge your equity or debt mutual fund units as collateral to a bank or non-banking financial company (NBFC). The bank provides you with an overdraft limit or a demand loan representing 50% to 80% of your portfolio's value.

Why it is an Intelligent Choice: Key Benefits

• Keep Compounding Intact: When you pledge your mutual fund units, they are NOT sold. You continue to earn regular returns, dividends, and compound interest on your full portfolio value.
• Ultra-Low Interest Rates: Because it is a secured loan, the interest rates are significantly lower than personal loans or credit cards (typically between 8.5% to 10.5%).
• Pay Only on What You Use: Setup as an overdraft, you are charged interest ONLY on the exact amount you withdraw and for the exact days you use it, not on the total sanctioned limit.
• Zero Prepayment Charges: Repay the borrowed amount anytime without penalty, offering immense flexibility.

Instead of disrupting your long-term wealth creation by redeeming mutual funds during a market dip, a Loan Against Mutual Funds ensures instant liquidity while your investments keep growing. Contact Nani Bachat Financial Services today to set up your instant paperless loan limit.