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Loan Against Mutual Funds – An Overview
A Loan Against Mutual Funds is a secured loan where you pledge your mutual fund units as collateral to obtain a loan from a financial institution. It is an attractive option for investors looking to access liquidity without having to sell their investments.
Quick Liquidity: The process of availing a loan against mutual funds is quick, and the loan amount can be disbursed within a few hours to a few days.
Lower Interest Rates: As the loan is secured against mutual funds, the interest rates are typically lower than unsecured loans.
No Need to Liquidate Investments: Borrowers can continue to hold their mutual fund investments while borrowing against them, ensuring that their investments continue to grow.
Documents Required for Loan Against Mutual Funds
The following documents are generally required for applying for a Loan Against Mutual Funds:
Identity Proof (Aadhar Card, Passport, Voter ID)
Address Proof (Aadhar, Utility Bill, Passport)
Passport Size Photograph
Signature Proof
Latest Mutual Fund Statement
Loan Against Mutual Funds Timeline
The approval and disbursal process for a Loan Against Mutual Funds typically takes 24 to 48 hours, depending on the financial institution and the valuation of the mutual funds.
Frequently Asked Questions
- What is a Loan Against Mutual Funds?
- How Much Loan Can I Get Against My Mutual Funds?
- Can I Withdraw My Mutual Funds During the Loan Tenure?
