Can I withdraw again after repaying?

Yes. As you repay principal, your available limit is refreshed within the sanctioned facility, subject to lender terms and the value of pledged units.

What is the tenure of a loan against mutual funds?

Facilities are often structured as renewable lines (commonly reviewed annually). Exact tenure, renewal, and repayment conditions depend on the lender’s offer and regulatory norms.

A shortfall occurs when the value of pledged mutual funds falls below the lender’s required collateral cover relative to the outstanding loan. You may be asked to pledge additional units or repay part of the loan to restore adequate cover.

Loan Against Mutual Funds (LAMF) – Instant Liquidity

Q: What happens to my funds after taking a loan?

Your mutual fund units are pledged as collateral with the lender. You remain the owner and continue to benefit from NAV growth and distributions, but you typically cannot redeem or switch those units until the loan is repaid or reduced. If the value of pledged funds falls meaningfully, you may need to top up collateral or repay part of the outstanding amount.

Q: What types of funds can be used as collateral?

Generally, open-ended equity, debt, and hybrid mutual funds that the lender accepts can be pledged. ELSS and other schemes with a lock-in period usually cannot be pledged until the lock-in ends. Eligible schemes are determined by the lending partner’s policy.

Q: Do I have to pay interest on the full line amount?

No. Interest is charged on the amount you actually withdraw or utilise, based on the outstanding balance—not on the entire sanctioned limit.

LAMF

Get Instant Loans Against Your Mutual Funds

Access quick, hassle-free funding without redeeming your portfolio — competitive rates, a fully digital journey, and repayment flexibility designed around your cash flows.

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No need to sell your funds

Stay invested for long-term growth while unlocking short-term liquidity.

Interest only on what you use

Pay interest on drawn amounts, not on the entire sanctioned line.

Wealth and liquidity illustration — mutual fund holdings

Why LAMF

Key Benefits

All the essentials to access liquidity quickly — without interrupting your investment plan.

No mutual fund sale needed

Your investments keep compounding while you borrow against them.

Pay interest only on amount utilised

Interest applies to withdrawn balances, not the full limit.

Fast, digital disbursal

End-to-end digital process; funds can reach your account quickly after approval.

Flexible repayment

Repay principal when it suits you, in part or full. Interest is typically serviced on the outstanding drawn amount each month (subject to lender terms).

Process

How it works

Step-by-step — from limit check to drawdown and repayment.

Check your credit limit

See how much you can borrow against eligible mutual fund units — minimal paperwork and a guided digital flow.

Complete your KYC

One-time verification to activate the facility. Fully digital where permitted by regulations.

Pledge mutual fund units

Select eligible schemes to pledge. Your units remain yours; NAV growth continues subject to pledge terms.

Withdraw & repay anytime

Transfer funds to your bank when needed. Repay partially or in full as per your cash flow — typically no foreclosure charges on principal prepayment (confirm with your sanction letter).

Compare

LAMF vs personal loan vs redemption

Illustrative three-year scenario: accessing ₹3 lakh for a short-term need while keeping a mutual fund portfolio invested.

Numbers below are simplified for comparison; actual interest rates, charges, and investment returns depend on lender terms, fund performance, and your profile.

LAMF + ₹1,21,500 Indicative net gain vs selling units

Personal loan − ₹1,68,000 Higher interest on full draw

MF redemption − ₹1,08,000 Opportunity cost of stopped compounding

Illustrative outcome (₹ lakhs) — “gains” axis for comparison only.

	LAMF	Personal loan	MF redemption
Interest	Pay interest (indicative ~10.5% p.a.) only on the amount you use	Typically pay interest (indicative ~18% p.a.) on the full sanctioned amount	No loan interest, but you exit the fund
Processing time	Digital limit check & onboarding	Often 1–3 working days	Redemption proceeds usually T+1–3 business days
Investment growth	Eligible units generally remain invested	Your investments are unaffected	That capital stops compounding in the redeemed portion

Learn

Know more about LAMF

Short explainers and market perspectives from our team on YouTube.

Watch on YouTube We’ll gladly walk through LAMF on a call as well.

FAQ

Frequently asked questions

Basics of pledging mutual funds for liquidity.

What happens to my funds after taking a loan?

When you take a loan, eligible mutual fund units are pledged as collateral with the lender. You remain the beneficial owner and continue to participate in NAV changes and distributions per scheme rules, but redemption/switch of pledged units is restricted until obligations are met. If the value of collateral falls significantly, you may need to add units or repay part of the loan.

What types of funds can be used as collateral?

Typically, open-ended equity, debt, and hybrid mutual funds that the lender’s programme accepts can be pledged. ELSS and other lock-in schemes generally cannot be pledged until the lock-in expires. The final list is defined by the lending partner.

Do I have to pay interest on the full line amount?

You pay interest on the amount you have actually drawn or utilised, calculated on the outstanding balance — not on the entire unutilised limit.

Can I withdraw again once I have repaid?

Yes. As you repay, your available limit is replenished within the sanctioned facility (subject to lender rules and adequate collateral value). You can draw again up to the refreshed limit.

What is the tenure of the facility?

Loan-against-securities facilities are commonly structured as renewable lines (often reviewed yearly). Renewal, margin, and interest resets are set out in your sanction terms.

What is a shortfall?

A shortfall occurs when the market value of pledged units drops below the lender’s required cover for the outstanding amount. You may be asked to restore margin by pledging more units or by repaying part of the loan.

Loan Against Mutual Funds