An instant loan against mutual funds is a type of secured loan where you pledge your mutual fund investments as collateral to borrow money from a financial institution. This loan is typically offered by banks and non-banking financial companies (NBFCs). Here’s how it works:
Key Features
- Collateral: Mutual fund units are pledged as security.
- Loan Amount: Based on the value of your mutual fund holdings (typically 50-80% of the fund’s net asset value).
- Processing Time: Instant or within a few hours, depending on the lender.
- Tenure: Ranges from a few months to a few years.
- Interest Rate: Lower than unsecured loans like personal loans since it’s a secured loan.
How It Works
- Apply through a bank’s website or mobile app.
- Authorize the lender to access your mutual fund holdings through a central depository (like NSDL or CDSL in India).
- The lender evaluates the value of your holdings.
- If approved, the loan amount is disbursed quickly.
Benefits
- No Asset Liquidation: You retain ownership of mutual funds and continue to earn returns.
- Quick Access: Fast processing compared to traditional loans.
- Flexible Repayment: Many lenders offer flexible repayment options.
Risks
- Market Fluctuations: If mutual fund values drop, lenders may require additional collateral or partial loan repayment.
- Interest Costs: Extended repayment can increase overall borrowing costs.
Top Lenders Offering Instant Loans Against Mutual Funds in India
- HDFC Bank
- Loan Type: Overdraft facility
- Eligibility: Resident Indians with mutual fund holdings
- Loan Amount: Up to 50% of equity fund value and 80% of debt fund value
- Processing Time: Instant if holding details are verified
- ICICI Bank
- Loan Type: Loan against Securities
- Eligibility: Individuals with mutual funds held in demat form
- Loan Amount: Minimum ₹50,000; maximum based on mutual fund value
- Processing Time: Same-day disbursement
- Axis Bank
- Loan Type: Overdraft against Securities
- Eligibility: Mutual fund units registered with CDSL or NSDL
- Loan Amount: Depends on mutual fund value and lender policy
- Processing Time: Fast approval for existing customers
- Bajaj Finserv
- Loan Type: Flexi Loan
- Eligibility: Mutual fund holders through authorized platforms
- Loan Amount: Up to ₹10 crore (based on mutual fund portfolio)
- Processing Time: 24-48 hours
- Kotak Mahindra Bank
- Loan Type: Loan against Securities
- Eligibility: Mutual fund holdings with approved depositories
- Loan Amount: Based on the fund’s current market value
- Processing Time: Same-day loan disbursal after verification
Application Process
- Check Eligibility: Ensure your mutual funds are in demat form and linked to a depository like NSDL/CDSL.
- Apply Online: Visit the lender’s website or mobile app.
- Authorization: Give permission for the lender to access your mutual fund holdings.
- Loan Approval: The lender evaluates your portfolio and approves the loan.
- Disbursement: The amount is credited directly to your bank account.
By Pankaj Bansal
Anurag Dhole is a seasoned journalist and content writer with a passion for delivering timely, accurate, and engaging stories. With over 8 years of experience in digital media, she covers a wide range of topics—from breaking news and politics to business insights and cultural trends. Jane's writing style blends clarity with depth, aiming to inform and inspire readers in a fast-paced media landscape. When she’s not chasing stories, she’s likely reading investigative features or exploring local cafés for her next writing spot.
- ANURAG DHOLEhttps://indiatadkha.com/author/bitlancetechhubgmail-com/
- ANURAG DHOLEhttps://indiatadkha.com/author/bitlancetechhubgmail-com/
- ANURAG DHOLEhttps://indiatadkha.com/author/bitlancetechhubgmail-com/
- ANURAG DHOLEhttps://indiatadkha.com/author/bitlancetechhubgmail-com/
