Hassle-Free Ways to Avail a Loan Against Mutual Funds with an Affordable Interest Rate

Mutual funds are a great option to invest and earn good returns. Due to their profitability, versatility, liquidity and ease of investing, a majority of earning as well as retired individuals have parked their savings and surplus cash in mutual funds. As finances are not very predictable most of the time, a cash crunch or a sudden need can put an individual in a jeopardizing situation. To tackle the situation, one need not liquidate their mutual fund investment.

A loan against mutual funds is the right solution in such situations.

Leading banks and Non-Banking Financial Companies (NBFCs) provide these secured loans which can be availed for as much as INR 10 crores. Subject to the lending institution chosen, an individual can avail prompt loans that are processed in a matter of days, and that involve nominal formalities related to the paperwork, documentation requirements, along with online loan account management.

If you are contemplating availing loans against mutual funds, listed below are a few ways to make the interest rate more affordable:

Maintain a High Credit Score

Any debt instrument is granted on the basis of the credit score of the applicant which acts as a benchmark for assessing his/her creditworthiness. Higher the credit score, more are the chances of availing a loan with a lower rate of interest.

Assessing all Loan Options

You need to consider the available schemes among loans against mutual funds offered by the banks and Non-Banking Financial Companies (NBFCs) in your city. From the options, the most feasible scheme ought to be chosen.

After finding the right lender, you can negotiate further to lower the cost of borrowing.

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