FAQs: Managing Loans on smallcase

Loan Disbursal

1. How long does it take for the amount to get disbursed?

• After the application process is completed, the loan amount will be disbursed to your bank account in a couple of hours. 

2. What happens post the loan application is submitted?

• Once you submit your loan application, the lender will verify the details. If everything is in order, your application will be approved, and you’ll receive the funds in 2 working hours.

3. It’s been more than the mentioned time and I haven’t received my loan yet. What to do?

• If your loan application is taking too long to process, please contact our support team and we’ll resolve your issue as soon as possible.

Managing Your Loan

1. Where can I manage my loan once active?

• You can go to the ‘More’ tab on the smallcase app to view the ‘Loan Dashboard’ and manage your repayments, withdrawals, etc. in one place.

2. How are my monthly dues deducted?

• Monthly interest payments will be auto-debited from the bank account on which you had set up the e-mandate.

3. How can I pay back the loan fully/partially?

• You have the flexibility to repay the loan at any time. Visit the ‘More’ tab on the smallcase app to view the Loan Dashboard and tap on the ‘Repay Cash’ button to pay back the loan. Choose the amount you want to repay and you’re done! 

4. How does withdrawal work?

• After you’ve repaid the entire or part of your principal, your credit line is restored and you can withdraw cash, starting from a minimum ₹1,000 up to the total amount of principal you’ve repaid i.e. you can get cash without applying for a new loan. Note that as you withdraw, there will be a monthly interest on the total withdrawn amount. 

5. What happens if I fail to pay my monthly instalments?

• If you miss an interest payment, you have to pay a bounce charge of Rs. 1200. A late interest payment of 2% per month will be charged on the due interest amount from the due date until the date of the next payment. 

6. What happens if the value of my mutual funds suddenly drops?

• The amount that you have withdrawn or the outstanding loan amount cannot be greater than 45% of the pledged equity MFs and 85% of the pledged debt MFs. Let’s say you’ve pledged equity funds worth Rs 1,000. So, you can borrow up to Rs 450 against your equity funds (45% of Rs 1000). Now, if the value of the equity MFs drops to Rs. 900, you’re only eligible for 45% of this amount as a loan which is Rs. 405. So, if your outstanding loan amount is Rs. 450, you’ll need to repay Rs. 45 to bring your loan back within the allowed levels.

7. What are the cases where my mutual funds can be liquidated?

• If the value of your pledged mutual funds falls and your outstanding loan amount becomes greater than the loan-to-value of the mutual funds, you have to repay a certain outstanding amount such that your loan-to-value comes back within allowed limits.
• If you’re not able to pay this amount in 7 days, the lender may recover this amount by liquidating your pledged MFs after notifying you. 
• In addition to this, your mutual funds may be liquidated if the total outstanding amount is not paid by the end of the 3-year loan tenure.

8. How can I close my loan?

• You can request for loan closure from the help section of your ‘Loan Dashboard’ or by reaching out to the support team. If there is no outstanding amount, your pledged mutual funds will be released and your loan account will be closed as soon as possible without any foreclosure or hidden charges. 

We hope this guide was helpful in answering your queries regarding Loans Against Mutual Funds. If you have any concerns, questions, or feedback, please don’t hesitate to contact us via email at help@smallcase.com or chat with our support team.