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Check Out the Benefits of a Loan Against Mutual Funds

20 Jan 2023 0 COMMENT

Investing in mutual funds is a popular way to grow your wealth. Mutual fund investments are highly liquid and you can also use them to get a loan. A loan against mutual funds is a great way to take advantage of your mutual fund investments and access quick cash. In this blog, we’ll discuss the various benefits of loan against mutual funds.

What are the Features of Loans Against Mutual Funds?

Before moving on to the advantages of loan against mutual funds, it is important to understand its features. They are as follows:

  • The loan is offered against the value of your mutual fund holdings.
  • The units of your mutual fund investments are used to keep as collateral to borrow money from financial institutions.
  • Different types of mutual fund schemes like equity and debt are eligible to be considered as collateral.
  • The loan amount will be approved depending on the value of your mutual fund holdings.
  • Once the funds are disbursed to you, your mutual fund holdings will stay in your account. However, they will be locked and cannot be redeemed during the tenure of the loan or till the borrowed amount is repaid.
  • You can also opt for a loan against mutual funds digitally. By visiting on the bank’s website you can follow certain simple steps and get a loan.

What are the benefits of loan against mutual funds?

When you apply for a loan against mutual funds, you can enjoy the following benefits:

  • Get quick short-term funding during times of financial need.
  • The repayment process is also easy and the interest rate reasonable.
  • You can use both debt and equity-based mutual funds holdings as collateral.
  • While you may not be able to redeem your holding during the loan tenure, they remain in your account during that period.
  • You can apply for the loan online, from within the comfort of your home.
  • The application process is convenient and you have to deal with minimum to zero paperwork.
  • The funds are disbursed to you rapidly, which goes a long way if you are in a financial crunch.

In conclusion, a loan against mutual funds is a quick, reliable and easy option to gain access to funds. It also comes with a low interest rate, flexible terms and the ability to use the funds for any purpose. Whether you require short-term funding for your business or financial assistance for personal matters, loans against mutual funds are an affordable way to utilise your existing investments.

Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The contents herein above are solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments or any other product. Investments in securities market are subject to market risks, read all the related documents carefully before investing. Investors should consult their financial advisers whether the product is suitable for them before taking any decision. The contents herein mentioned are solely for informational and educational purpose.