Loan Against Mutual Funds

A Loan Against Mutual Funds (LAMF) is a secured loan where investors can pledge their mutual fund units as collateral to obtain funds. This type of loan allows investors to meet their financial needs without having to liquidate their mutual fund investments. Leveraging your mutual fund investments to secure immediate liquidity without liquidating your assets is an increasingly popular financial strategy in India. Several financial institutions offer loans against mutual funds, with Volt Money standing out for its swift, digital, and customer-centric approach.

Key Features of Loan Against Mutual Funds

• Collateral: The mutual fund units act as collateral for the loan, ensuring the safety of the lender's funds.

• Loan-to-Value (LTV) Ratio: The LTV ratio determines the loan amount that can be availed against the mutual fund units. For equity mutual funds, the LTV ratio is typically up to 50%, while for debt mutual funds, it can go up to 80%.

• Interest Rates: The interest rates on LAMF are generally lower compared to unsecured loans. Interest is charged only on the utilized amount and for the utilized period.

• Overdraft Facility: Many financial institutions offer an overdraft facility against mutual fund units, allowing borrowers to withdraw funds as needed and pay interest only on the utilized amount.

• Flexible Repayment: Borrowers can repay the loan as per their convenience, with options for part-payment and pre-payment without any penalties.

Benefits of Loan Against Mutual Funds

• No Need to Liquidate Investments: Investors can continue to earn returns on their mutual fund investments while availing the loan.

• Quick Disbursal: The loan approval and disbursal process is quick and hassle-free, often completed within a few hours.

• Minimal Documentation: The documentation required for availing a loan against mutual funds is minimal, making the process convenient for borrowers.

• Lower Interest Rates: Compared to personal loans or credit card loans, LAMF offers lower interest rates, reducing the overall cost of borrowing.

• Retain Ownership: Investors retain ownership of their mutual fund units and continue to benefit from any capital appreciation.

Volt Money's Digital Solution

Volt Money offers a seamless, fully digital platform for availing loans against mutual funds. Key features include:

• Instant Credit Line: Borrow amounts ranging from ₹25,000 to ₹1 crore, with funds accessible in as little as 15 minutes.

• Competitive Interest Rates: Enjoy attractive interest rates between 9% and 11%, with interest charged only on the utilized amount for the duration of its use.

• Flexible Repayment: Repay the principal at your convenience without any prepayment charges; only the interest is payable monthly.

• Extensive Fund Coverage: Access over 4,500 approved mutual funds across various Asset Management Companies (AMCs) in India.

• User-Friendly Mobile Application: Manage your loan effortlessly through the Volt Money app, available on both Android and iOS platforms.