Who Can Take Loan Against Mutual Funds (LAMF) Online?
Ever thought about turning your mutual fund investments into a financial solution? Well, that’s where “Loan against Mutual Funds” comes into play! It’s like giving your investments a chance to multitask. Additionally, the loan against mutual funds online (LAMF) industry in India is growing rapidly. In 2022, the industry grew by 25% to reach a value of ₹1.5 trillion. This growth is being driven by a number of factors. It is, anyway, easier to take out a loan against insurance or loan against shares because of the presence of a collateral in case of failure to repay the loan.
A lot of you might be wondering ‘can we take loan against mutual funds?’ Well, let’s find that out.
What is a Loan Against Mutual Funds?
Loan Against Mutual Funds or LAMF is a loan availed against your mutual funds. It encompasses both ‘loan against credit mutual funds’ and ‘loan against debit mutual funds’.In simple terms, a loan against mutual funds is like getting a financial helping hand while not parting ways with your hard-earned investments. The smallcase Loans Against Securities enables you to quickly access funds by marking lien on mutual funds under the management of asset management companies registered with CAMS. Loan against mutual fund can be availed for your current MFs in the demat account in a few easy steps.
Who Can Apply for Digital Loans Against Mutual Fund Online?
So, the question currently on everyone’s mind is, “who can apply for loan against mutual funds?” followed by ‘what are the loan against MFs requirements?”
Therefore, many banks have laid down certain common guidelines for every investor who can take against mutual funds.
1. Applicant’s Indian Citizenship
To be eligible for Digital LAMF, the foremost requirement is Indian citizenship. If you are considering applying for LAMF, you need to fulfill this primary criterion by being an Indian citizen.
2. Age Requirement
To avail loan against MFs, an individual should be between 18 years to 65 years of age.
3. Loan Amount Limits
The loan amount for LAMF comes with specified limits. You can avail up to 45% for equity MFs and 85% for debt MFs. The minimum in loan amount available against MFs at smallcase is ₹25K, while the upper limits are set at ₹5 Cr.
4. An Individual Investor
Self-employed/ Salaried Residents (for equity and debt funding) can take a loan against MF.
5. Must be Bank’s Customer
If you are seeking a Digital LAMF, it’s necessary to have an existing banking relationship with the same bank. This association allows you to streamline the verification process by logging into your bank account, significantly reducing the verification formalities.
6. Eligible Fund Houses
smallcase Digital LAMF service caters to customers who hold assets in any of the fund houses currently registered with CAMS.
If you like to apply for a loan against mutual funds online (LAMF), check more on eligibility & documents required by banks.
However, for getting a LAMF on smallcase, you do not need any detailed list of documents* if you want to opt for a loan against mutual funds(LAMF). So experience the hassle-free process with zero formalities! Now, let us figure out how to get loan on MFs online, with smallcase!
*Some users may be asked to produce their Aadhar number in case of any discrepancies.
How Can I Apply for a Loan Against Mutual Funds Online?
Rather than getting a loan against assets or a loan against bonds, consider getting a loan against mutual funds. Unlock a LAMF online and hassle-free, at smallcase! It’s a quick and paperless process. Just have your PAN (if you’re new to smallcase) and the phone number or email linked to your mutual funds ready.
The following steps will lead to you availing a loan against your MFs online, via smallcase:
- Import your mutual fund investments and choose the ones to use as collateral.
- Check your LAMF eligibility.
- Add a bank account for receiving funds and set up monthly interest auto-debit.
- Pledge your MFs, then sign the online mutual fund loan agreement to complete the process.
If you need to take a break, you can pick up where you left off anytime. Even if you had left off the process midway. Remember, once pledged, you can’t sell or redeem your mutual funds. The monthly interest will be automatically deducted from your provided bank account. Be aware that late payment interest and bounce charges apply for delays in monthly interest payments.
For precise loan amount calculations, ensure you provide all relevant email addresses or mobile numbers linked to your MFs, especially if you have multiple email IDs or numbers.
To Wrap It Up…
Availing a LAMF has never been easier! Within a matter of a few clicks, you can now manage to withdraw a loan up to ₹5 crores, against your existing MF investments. smallcase provides you with a platform where you don’t even need to leave the comfort of your home to get funds loan. Thus, to answer your question- yes, you can take a loan against MFs online, and with ample ease, with smallcase!
The loan you can get is based on the value of your mutual funds used as collateral. You can borrow from ₹25,000 to ₹5 crore against your mutual funds.
Yes. You can pledge shares and your MFs as collateral to take out a loan against your stock or mutual fund investments.
Yes. The smallcase process for withdrawing a LAMF is completely online and paperless!
The default tenure of the loan is 36 months.
To avoid late interest payment penalties, new investors must set up an E-mandate for automatic monthly interest collection.
All About Loan Against Securities & Loan Against Mutual Funds on smallcase –
smallcase offers quick and easy disbursement of loans against securities ( LAMF), all about eligibility, documents, features and benefits of Loan against mutual funds and the process for applying for loan is just one click away –
