Loan Against Mutual Funds (LAMF) is becoming one of the smartest ways for Indian investors to unlock liquidity without selling their investments. Instead of redeeming your mutual fund units and triggering taxes or missing out on future gains, you can pledge them and get instant funds at relatively lower interest rates.
In this blog, we’ll explore the best platforms in India offering loans against mutual funds, compare their features, and help you decide which one suits your needs.
What is a Loan Against Mutual Funds?
A loan against mutual funds allows you to borrow money by pledging your mutual fund units as collateral. You continue to stay invested in the market while meeting your short-term financial needs.
Key Benefits:
- No need to redeem investments
- Quick access to funds
- Lower interest rates compared to personal loans
- Flexible repayment options
Platforms Offering Loan Against Mutual Funds in India
Groww Credit
Groww Credit by Groww offers a fully digital loan against mutual funds, allowing users to pledge their investments and access instant liquidity without redeeming them. One of its biggest advantages is that your mutual funds remain invested and continue earning returns, helping you benefit from compounding even while using the funds.
The platform provides a flexible credit line (up to ₹15 crore depending on holdings), where you can withdraw money anytime and repay it as per your convenience within the tenure. Interest is charged only on the amount withdrawn and only for the duration it is used, making it highly cost-efficient compared to traditional loans. The process is 100% digital with instant approval and disbursal within minutes.
Volt Money
Volt Money enables users to unlock a credit line almost instantly by pledging their mutual fund units online. The entire journey is completely paperless, and users can often get approval within minutes. One of its biggest advantages is flexibility, as borrowers can withdraw funds as needed and pay interest only on the amount used.
The platform also has relaxed eligibility criteria, with no strict income or credit score requirements. This makes it accessible to a wide range of users, including freelancers and self-employed individuals. Its fast disbursal and user-friendly interface make it a top choice for quick liquidity needs.
Bajaj Finserv
Bajaj Finserv is a well-established NBFC offering loans against mutual funds with a strong reputation in the lending space. It allows customers to pledge units from a wide range of mutual fund schemes and access funds without selling their investments.
The platform offers instant approval, minimal charges, and simple eligibility requirements, making it accessible for many borrowers. One of its key advantages is the high loan-to-value ratio, which can go up to around 90% depending on the fund type. The process is relatively quick, and funds are disbursed in a short time frame. It is ideal for users who prefer a trusted NBFC with strong customer service.
Mirae Asset Financial Services
Mirae Asset Financial Services offers loan against mutual funds with a strong focus on digital execution and speed. Backed by a reputed asset management company, it provides a reliable platform for investors to access funds quickly. Users can generate loan limits online and receive funds soon after completing the pledge process.
The platform supports a wide range of mutual fund schemes, making it flexible for different investors. It is also known for offering competitive interest rates compared to many traditional lenders.
FundsIndia
FundsIndia is primarily an investment platform that also offers loans against mutual funds through its lending partners. It allows users to access loans directly from their existing investment dashboard without transferring their portfolio elsewhere. This integration makes the borrowing process convenient and hassle-free. The platform supports a variety of mutual fund schemes, giving users flexibility in pledging their investments. While the lending is facilitated through partners, the experience remains smooth and user-friendly.
ET Money
ET Money is an emerging digital platform offering quick and convenient loans against mutual funds. These platforms focus on providing instant access to funds through a simple app-based process. Users can pledge their mutual fund holdings and receive loan approvals quickly with minimal documentation.
They typically offer competitive interest rates and flexible repayment options, making them attractive for short-term liquidity needs. The entire journey is designed to be user-friendly and fast, appealing to digital-first customers. These platforms are especially beneficial for users who want quick access to funds without lengthy approval processes. They also integrate well with investment tracking features, adding convenience. Overall, they are ideal for borrowers seeking speed and simplicity.
Conclusion
A loan against mutual funds is a smart liquidity tool for investors who don’t want to disturb their portfolio. If used wisely, LAMF can help you manage short-term financial needs without compromising long-term wealth creation. Additionally, since there is no redemption, borrowers can avoid capital gains tax, making it a tax-efficient borrowing option.
