Financial crunches are an everyday thing now. Either you take a loan or you pay from your own pocket, you can't just escape your cash needs. Talking of taking a loan, it is quite possible to take one every time there's a dearth of cash.

However, one should not expect the same to be available at a lower interest rate every time. If you do wish to avail a loan at a lower interest rate every time, here are some tips which can help you do that.

Cross check your eligibility: Before you set your ambitions high, it would be wise to cross-check your loan eligibility. You might be eligible for a loan against mutual funds based on your own understanding of the credit facility, banks/ NBFC might have the same opinion. So, once you’re done with choosing the right lender for yourself, find out the eligibility conditions on their website.

Generally, the eligibility conditions would be as following: (1) you must be above 21 years of age, (2) must be earning enough every month to qualify the minimum income condition, (3) your CIBIL score must be up to the mark.

Mutual funds maturity value: Any lender irrespective of how flexible they are, would only approve an application asking for a maximum of 60% to 70% of collateral’s maturity value as loan. So, make sure the maturity value of mutual funds you plan to mortgage is more than what you desire to borrow.

Bottom line: Arrange all the required documents in advance. You’ll need them while applying for a loan against mutual funds online. 

To Know more about how to approve loan against mutual funds at a low rate, click here: Borrowing a Loan Against Mutual Funds at a Lower Rate Made Easy

There arise many instances in our lives wherein we require funds on a short notice but we do not have the requisite amount in our savings. The emergency is of such a pressing nature that we cannot wait for a bonus or salary hike and the assets cannot be liquidated on such a short notice. Despite this many individuals go ahead and sell their assets at a loss and lose ownership as well.

What such people do not know is that instead of selling off their high-value investments such as mutual funds, they can apply for a loan against it. This not only helps in retaining ownership but they also continue to earn interest for the period during which they are pledged as a collateral.

Availing Loan Against Mutual Funds

There are a number of financial institutions including NBFCs (Non-Banking Financial Companies) which offer loan against mutual funds at nominal rates. One of the biggest benefits provided by NBFCs is that of the sanctioned amount, you have the liberty to use as much money as you require and pay interest only for the part that is used. This greatly reduces the installment which is paid each month.

Loan Against Mutual Funds

The process of application is very easy. Here’s how you can do it - 

1. Apply for the loan online
2. Fill out the application form with the basic details
3. A confirmatory text will be sent along with an email regarding the status
4. Next, a representative will visit you to complete the process and gather documents
5. Once your documents have been verified, the funds are disbursed in a very short span of time. 

You can also track the disbursal of the loan from the online account which is provided to you.

To know more about this loan facility, click here: How to Avail a Loan Against Mutual Funds

Since the time I have been investing I wonder how actually can mutual funds be of use. Though, I would admit that these investments have been quite a nail-biting experience for me. But, nonetheless they have offered me appreciable returns.

Well, to my surprise my financial planner told me that now that I have made appreciable returns on my mutual funds I can take a loan against them. I am thrilled because I am planning an exotic vacation with family and now I feel I won’t have to withdraw from my savings.

So, I took out time form my schedule and sat down with my financial planner how to go about it. She suggested me an experienced lender with credibility and reputation. Then, depending on the amount I needed she helped me fill up the form for the loan against mutual funds online. After which, we won’t have to wait loan and can enjoy instant approval for the loan.




Trusting my financial planner I took the bargain and applied for a loan amount which would cover my entire vacation itinerary and which I can easily pay back on a monthly basis. I was thrilled to get the loan as planned and moreover I suggested my colleague for the same as he too needed funds to manage his mother’s treatment expenses.

The best part is I don’t have to take the help of my financial planner often. As my loan is all set up online I make sure the repayments are on time and that I track and manage it even when I am out of town for business work.

Also read: Did you Know you can Get a Loan Against Your Mutual Fund Units

Financial crisis can hit anyone, at anytime. Instead of giving into panic you can take loan against your investments. This is a traditional yet quicker method to liquidate your fixed assets. If you are not sure how to go about it I suggest your conduct a primary research online. You will find numerous lenders especially NBFCs which offer proper guidance and support to help you get the loan.

One of the benefits of getting a loan against mutual funds is that you do not have to redeem your units before time. It also makes sure that your SIP or Systematic Investment Plan does not get affected , in any way. 




The best part is as most of the information is online it saves your time. You do not have to meet the lender in person to finalize the deal. However, you can always do that if you have time for one-on-one interactions. With digitisation taking over it becomes easier to manage the loan against mutual funds online. You can track it anytime from anywhere and take informed decisions during the loan cycle.

In order to get the loan it is important you know the eligibility criteria for the process. Usually, lenders provide the loan to applicants -

Whose mutual fund or collateral in this case is of a certain minimum value and they all the paperwork stating the same. Additionally, lenders prefer applicants who have a stable source of income such as a job. This ensures the lender that the applicant is capable to pay back the loan.

For more information read this article: 6 Things to Know About Loan Against Mutual Funds

A lender will put a lien on the pledged units of the mutual funds, as these will be sold and recovered by the banks and NBFCs when an applicant becomes a defaulter.

Generally, a loan against mutual funds is sanctioned up to 60-70% of the pledged value of the mutual funds at the time of application.

Read More :- Important Tips to Help You Qualify For Loan Against Mutual Funds