Loans Against Mutual Funds (LAMF)
Protecting Your Assets, Powering Your Peace.
What Is a Loans Against Mutual Funds (LAMF) ?
A Loan Against Mutual Funds (LAMF) is a secured loan that allows investors to borrow money by pledging their mutual fund units as collateral. Instead of redeeming your mutual funds, you can unlock liquidity while continuing to enjoy potential returns and ownership of your investments.
Key Features of Loans Against Mutual Funds
Your mutual funds remain invested, allowing you to benefit from NAV growth, dividends, and interest (in debt funds).
Most lenders offer instant approval through online platforms, with lien marking done electronically.
Since the loan is secured, interest rates are lower than personal loans or credit cards.
Loan is usually provided as an overdraft limit—interest is charged only on the amount utilized, not on the entire sanctioned limit.
Lenders typically offer 40%–80% of the mutual fund value depending on fund type.
Eligible Mutual Funds
Most lenders allow loans against:
LTV (Loan-to-Value) typically 40–50% due to higher volatility.
LTV typically 70–80% because they are more stable.
Loan value depends on equity/debt mix.
Not usually eligible until the 3-year lock-in is over.
How Loans Against Mutual Funds Work
Select the mutual funds you want to pledge from your demat/folio.
The lender marks a lien on those units with the mutual fund registrar (CAMS/KFin).
A sanction limit is provided based on current NAV and eligible LTV.
You can withdraw funds as needed from the limit.
Interest is charged only on used amount (not on full limit).
Once you repay, the lien is removed and units are released back to you.
Benefits of Loans Against Mutual Funds
No need to break your SIP or sell your MF units during short-term cash needs.
Interest rates are lower than unsecured loans.
You can repay partially or fully at any time; many lenders have no foreclosure charges.
Your mutual funds keep compounding in the market even while pledged.
Approvals are fast because mutual funds are easy to value and pledge.
Risks & Points to Consider
<data-start=”2889″ data-end=”2919″>1. Market Fluctuations
If NAV drops significantly, you may receive a margin call asking you to pledge more units or repay part of the loan.
<data-start=”3042″ data-end=”3071″>2. Approved Fund List
Not all mutual fund schemes may be accepted by the lender.
<data-start=”3132″ data-end=”3157″>3. LTV Variations
Loan limits fluctuate daily based on NAV changes.
<data-start=”3209″ data-end=”3235″>4. Locked-in Units
Pledged units cannot be redeemed until the loan is cleared and the lien is removed.
Loan-to-Value (Typical LTV Range)
| Type of Mutual Fund | Approx. LTV Offered |
|---|---|
| Equity Mutual Funds | 40–50% |
| Hybrid Mutual Funds | 50–65% |
| Debt Mutual Funds | 70–80% |
Who Should Consider a Loan Against Mutual Funds?
Investors needing short-term liquidity without disrupting long-term goals
Individuals wanting a cheaper alternative to personal loans
Business owners needing immediate working capital
Investors avoiding premature MF redemption during market volatility
High-net-worth individuals (HNIs) seeking large, flexible lines of credit
A Loan Against Mutual Funds is a smart and efficient way to access liquidity without redeeming your investments. It offers low interest rates, flexible usage, and preserves your long-term wealth creation. Ideal for handling emergencies, business needs, or planned expenses without disturbing your mutual fund portfolio.
Investment Solution
Mutual Funds & SIP
A Mutual Fund is an investment vehicle that pools money from multiple investors and invests it in a diversified portfolio of assets such as equities
Fixed Deposit & Corporate FD’s
Fixed Deposits (FDs) have long been a preferred choice for conservative investors seeking assured returns and capital protection. Offered by banks and NBFCs, FDs allow you to deposit
Bonds / NCD
Bonds are fixed-income instruments issued by governments or companies to raise capital, paying periodic interest and returning principal at maturity.
Government Bonds & Debt Instruments
In today’s unpredictable market landscape, many investors look for avenues that offer stability, regular income, and capital preservation.
Insurance
Life Insurance
Life insurance is a financial protection plan that ensures your loved ones remain financially secure in case of your untimely demise.
Health Insurance
Health insurance provides financial protection against medical expenses due to illnesses, accidents, and hospitalization. Even if you are healthy today, medical emergencies can arise at any time.
General Insurance
General Insurance provides financial protection against non-life risks such as accidents, health emergencies, property damage, theft, or liability.
Loans
Loans Against Security
A Loan Against Security is a credit facility where you pledge your financial investments—such as mutual funds, shares, bonds, insurance policies, or fixed deposits
Loans Against Mutual Funds
At Wealthmart Global, our Loans Against Securities (LAS) solution empowers you to access funds without having to liquidate your long-term investments.