FAQs: Top up on Loan Against Mutual Funds on smallcase

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Q.1 What is top-up?

A top-up allows you to increase the loan amount on your existing loan against mutual funds by pledging additional mutual fund units. The minimum top-up amount is ₹25,000.

Q.2 What’s the process of top-up?

To top up your loan, simply tap the ‘Top Up’ button below your loan card on the dashboard. Your existing details will be pre-filled, allowing you to easily import your updated holdings. After reviewing and confirming the top-up amount, you can set up a new e-mandate, pledge additional funds, and sign the agreement.

Q.3 What are the charges for top-up?

A minimal processing fee is charged only on your total top-up amount.

Loan Amount	Total Fees
Under ₹1 lakh	₹999 + 18% GST
Between ₹1 to ₹5 lakh	1% of loan amount + 18% GST
More than ₹5 lakh	₹4,999 + 18% GST

Q.4 How will my interest payment change with a top-up?

After the top-up, your EMI will be based on the new total loan amount (original loan plus the top-up). While your EMI will increase to cover the larger outstanding loan, the interest rate remains the same.

For example, if your original cash withdrawn was ₹1 lakh with a 10.75% p.a. interest rate, your monthly interest payment was ₹896. With a top-up of ₹50,000, your total loan becomes ₹1.5 lakh, and your new monthly interest payment will be ₹1,344 (calculated as 10.75%/12 x ₹1.5 lakh).

Q.5 Will my loan tenure change if I top-up the loan?

When you top-up your loan, the tenure is extended to 3 years from the date of the top-up application, before the loan matures. This gives you more time to either repay or renew your loan.

Q.6 Is there a limit to how many times I can top-up my loan?

No, there is no limit on the number of times you can top-up your loan, as long as you have eligible mutual funds to pledge. Please note a processing fee is applicable for every top up.

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Shivani Shah

Content & marketing @smallcaseHQ The content in this article is purely the author’s personal opinion and is for informational and educational purposes only. It should not be construed as professional financial advice and nor to be construed as an offer to buy /sell or the solicitation of an offer to buy / sell any security or financial products. The views and opinions stated in the content belong to the author. Smallcase Technologies Private Limited does not uphold nor promote any of the views / opinions.

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