Loan Against Mutual Funds (LAS) – Unlock Liquidity Without Selling Your Investments
A Loan Against Mutual Funds (LAS) allows investors to leverage their mutual fund holdings to secure a loan without liquidating their assets. This facility provides quick liquidity while your investments continue to grow.
What is Loan Against Mutual Funds (LAS)?
Loan Against Mutual Funds (LAS) is a secured loan where mutual fund units are used as collateral to obtain funds from banks or NBFCs. This allows investors to meet urgent financial needs without redeeming their mutual fund investments.
Key Features of LAS
- Instant Liquidity – Get a loan without selling your mutual fund units.
- Retain Investment Benefits – Your investments remain in the market and continue to earn returns.
- Lower Interest Rates – Compared to personal loans or credit cards, LAS comes with competitive interest rates.
- Flexible Repayment – Pay interest only on the utilized amount and repay as per convenience.
- High Loan Value – Loan amount varies based on the type of mutual funds pledged (Equity: 50%-70%, Debt: 80%-90%).
Eligibility Criteria for LAS
- You must hold mutual fund units in demat or physical form.
- Both individual and non-individual investors (HUFs, firms, companies) can apply.
- Your creditworthiness and investment portfolio determine the loan amount.
How to Apply for LAS?
- Select a bank or NBFC offering loans against mutual funds.
- Submit an application along with KYC documents and mutual fund details.
- The financial institution evaluates the fund value and grants a loan limit.
- Once approved, the loan amount is disbursed to your account.
Who Should Consider LAS?
- Investors needing short-term liquidity without disturbing their investments.
- Business owners looking for working capital or emergency funds.
- Individuals wanting quick funds at lower interest rates compared to personal loans.
💡 Tip: Always compare interest rates and processing fees before applying for a Loan Against Mutual Funds.