Running short on cash but don’t want to redeem your mutual fund investments? good news — leading fintech platforms like PhonePe, Paytm, BharatPe, and Cred now let you take instant loans against your mutual fund holdings. This means you get liquidity without disturbing your long-term wealth creation plans. Here’s everything you need to know.
🧾 1. What is a Loan Against Mutual Funds?
A loan against mutual funds (LAMF) allows you to borrow money by pledging your mutual fund units as collateral. Instead of selling your funds, they are just “lien-marked” until you repay the loan.
📱 2. How Fintech Apps Simplify the Process
Earlier, you had to approach a bank or NBFC to avail this facility — a process that could take days. Now, platforms like PhonePe, Paytm, BharatPe, and Cred offer:
100% wallet PLATFORM' target='_blank' title='digital-Latest Updates, Photos, Videos are a click away, CLICK NOW'>digital process
Instant approval within minutes
Seamless integration with mutual fund folios
💰 3. Loan Amount & Eligibility
You can typically borrow 50–80% of the value of your mutual fund units.
Example: If you have ₹5 lakh invested, you may get ₹2.5–4 lakh as a loan, depending on the fund type and lender’s policy.
📉 4. Interest Rates & Repayment
Interest rates are usually lower than personal loans since mutual funds act as collateral.
Rates: Around 9–13% p.a. (varies by lender)
Repayment: Flexible EMIs or bullet repayment (pay all at once at the end of tenure)
⚡ 5. Benefits of Using This Facility
No Need to Redeem: Your investments continue to grow.
Quick Liquidity: Great for emergencies or big expenses.
Lower Interest: Cheaper than credit card debt or unsecured personal loans.
Paperless Process: No heavy documentation required.
⚠️ 6. Things to Keep in Mind
If mutual fund value drops significantly, you may have to pledge more units or repay part of the loan.
Defaulting may lead to the lender selling your pledged units.
Compare interest rates and processing fees before choosing a platform.
✅ Bottom Line: Loan against mutual funds is a smart way to access cash without breaking your investments. With PhonePe, Paytm, BharatPe, and Cred making it instant and hassle-free, it’s now easier than ever to stay financially flexible.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk..jpg)
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