With every passing day, the need for instant access to credit is becoming more and more vital. The majority of Indians are still using personal loans, Buy Now Pay Later(BNPL) schemes or credit card loans for fulfilling this need. But these schemes have a big drawback of high interest rates. Due to this the popularity of Loan Against a Mutual Fund has increased among people. But what is a Loan Against Mutual Fund? What makes them better than Personal or credit card loans? Get the answer to all such questions with Neoble’s complete guide for Loan Against Mutual Fund.
What is Loan Against Mutual Fund?
Loan Against Mutual Funds, popularly known as LAMF is a new-age financial product which helps you obtain a loan with the help of your mutual fund. This product allows investors like you to access short-term credit without having to sell your mutual fund investment portfolio in times of emergency.
How Can I Get an Instant Loan Against a Mutual Fund?
To obtain an Instant Loan Against Mutual Funds, you need to approach a Bank or NBFC like Neoble and request them to provide a loan against your mutual fund investment. After submitting your request, the bank or NBFC will assess the loan amount that can be provided to you according to your mutual fund value. The amount will be disbursed into your loan account after seeking a lien(a document that gives ownership access to securities to the bank or NBFC) on your mutual fund units. Once you repay the loan amount, the lien will be lifted from the mutual fund unit and ownership will be returned to you.
How much credit will I get through LAMF?
The amount of credit that you can get through LAMF depends on various factors. Some of the factors are –
Type Of Mutual Funds You Have In Your Folio –
In India we have mainly two types of mutual funds, the first is equity mutual fund which is much more volatile due to its linkage with the stock market and the second is the debt mutual fund which is considered to be safe as the money over here is invested in government bonds, company bonds, etc. Your loan amount will depend on the type of mutual fund you have in your portfolio. Both equity and debt mutual funds are pledgeable for loans, but the credit amount provided on them may vary.
Total Investment Value Of Your Mutual Fund-
The amount that you will receive as credit through LAMF also depends on the total investment value of your mutual funds. Most lenders have an upper and a lower limit that they can offer as loans against your mutual fund.
You can also check your loan amount with our Loan Over Mutual Fund Calculator to get an accurate amount.
Minimum Value Of Investment –
The minimum Value Of investment refers to the minimum amount of value that your mutual fund investment should have. This amount may vary from lender to lender, so it’s important to consult a trusted LAMF lender to determine the specific minimum investment value.
The correct amount which can be provided as a credit to you is determined only after a thorough check. Interested in finding out how much loan you can get through LAMF? Get professional help to determine the accurate value of a loan against a Mutual Fund with Neoble.
From where can I get a Loan Against Mutual Fund?
Loan Against Mutual Funds service is available with Neoble – India’s Fastest Growing LAMF Startup and all major Private sector banks, Public Sector Banks, and NBFCs of India.
Why LAMF is better than Normal Loan?
Attractive Rate Of Interest – Interest rate is the most important factor that a customer looks before selecting the type of loan he will be taking. The interest rate on LAMF products is lower than personal or credit card loans, making it a highly attractive pocket-friendly option to most customers. The low interest rate not only reduces your EMI but also ensures that the constant yearly return you get on your mutual fund will make your investment worth a lot after the lien period. Want to obtain the highest loan amount at the lowest interest rate contact the Neoble team now to get the correct loan amount idea with their Loan Over Mutual Fund calculator.
Access to instant credit – In today’s digital age, having access to instant money in the form of small credit has become a significant necessity. We all require small loans for various personal and professional needs from time to time. However, obtaining an instant loan from banks is often not feasible due to various legalities and documentation. With LAMF, you can get access to instant credit without going through a tedious process.
Convenient Way To Get Loan – Conveniently obtaining a loan is crucial to those who need quick cash due to various financial emergencies. Most individuals seeking short-term loans prefer to avoid lengthy documentation and other time-consuming processes that cost time and energy.
In LAMF, most of the work is done digitally, making it the best way to obtain short-term loans without any hassle.
No Income Proof Required – LAMF is a financial product that is based on your mutual fund. Any credit you receive through LAMF is provided according to the value of your mutual fund, thus making it easy to get a loan without income proof.
No need to liquidate investment – Investments have always played an important role in our Indian society and as a result, we feel uneasy about selling them to raise cash for our short-term needs. With LAMF, you get instant credit based on your Mutual Fund Portfolio without having to sell a single unit of your investment.
No need to stop your Systematic Investment Plan(SIP) – One of the major benefits that LAMF provides is that you do not need to stop the SIP of your mutual funds. You can continue your Loan Against SIP as you were doing before taking the loan, thus making your investment much more valuable after the end of your loan period.
Less Paperwork – With the arrival of affordable high-speed internet and the vision of making India digital, the majority of the process for obtaining a loan against mutual funds is now digital. This makes your overall loan process very smooth with little or no requirement for physically visiting any branch for a loan.
Conclusion –
Financial crises can loom up at any time in our lives. Most of us use our valuable investments for money or take up high-interest rate Personal loans due to less awareness regarding Loan Against Mutual Funds. Getting a loan by keeping your mutual fund as collateral with the lender is one of the most preferred ways of raising capital in current times.
Protect your investments by raising capital through Loan Against Mutual Fund rather than selling your mutual fund with Neoble – an easy way to get a mutual fund loan with minimum documentation now.