Sahare Wealth · Loan against mutual funds
Need cash? Don't redeem your funds
Pledge your mutual fund units to raise money while they stay invested. You avoid selling at a bad time, but a fall in fund value can bring a margin call. Estimate what you may get, then compare providers.
- Funds stay invested
- Risks explained upfront
- Help from Nagpur
Estimate
How much could you borrow?
Enter the value of your funds. This is only an illustration.
Eligibility calculator
Move the sliders to see an estimate.
Illustration only. Loan-to-value, eligible schemes and the final amount differ by lender and change with market value. This is not a loan offer.
The basics
How a loan against mutual funds works
You borrow against what you already own. The funds are the lender's security until you repay.
Step 1
Your units are the security
The lender marks a lien on your units. They remain yours and stay invested.
Step 2
You get a limit
The limit is a percentage of the value of the units. It varies by lender and type of fund.
Step 3
Repay, and the lien is removed
After repayment, the lender releases the lien and the units are fully yours again.
Our providers
Choose a LAMF provider
Open a provider's page to read the details. Compare rates, charges and terms before you apply.
FundBazar
Read how this provider's loan against mutual funds works. Check its rates, charges and terms before you apply.
Yeno
Read how this provider's loan against mutual funds works. Check its rates, charges and terms before you apply.
Lark
Read how this provider's loan against mutual funds works. Check its rates, charges and terms before you apply.
Bajaj Finance
Read how this provider's loan against mutual funds works. Check its rates, charges and terms before you apply.
Process
Getting a loan against your funds
Most of it is online. You approve the lien through the fund's registrar with an OTP.
Pick the units to pledge
Only the funds a lender approves are accepted. Different lenders have different lists.
Apply and complete KYC
Share your PAN and Aadhaar details, and link the bank account where the money will arrive.
Approve the lien
You confirm the lien through the registrar (CAMS or KFintech) or your depository with an OTP. Marked units cannot be redeemed.
Use the money and repay
Draw what you need, pay interest, and repay. Then the lien is released.
Compare
Loan vs redeeming your funds
| Loan against funds | Redeeming the units | |
|---|---|---|
| Your investment | Stays invested and can keep growing | Ends for the amount redeemed |
| You pay | Interest on what you use, plus any lender charges | Exit load, if any, and tax on gains |
| Risk | Margin call if the fund value falls | None after you sell, but you lose future growth |
| Best when | You need money for a short time and plan to repay | You need money for good and don't plan to repay |
Before you borrow
Risks to understand
A fall in value can force a sale
If the value of your pledged units drops, the lender can ask you to repay part of the loan or pledge more units. If you don't act in the time given, the lender can redeem your units to recover its money, even at a loss to you.
Markets are volatile
Equity funds can fall quickly. Keep a buffer; don't borrow your full limit.
Interest adds up
Loan interest can be more than what your fund earns. Compare before you borrow.
Pledged means locked
You can't redeem or switch pledged units until the lien is removed.
Taxes if units are sold
If the lender sells your units, it counts as a sale for tax. Ask your tax adviser.
Only registered lenders
Borrow only from banks and NBFCs registered with RBI. Check on RBI Sachet (opens in a new tab).
Read the agreement
Understand the margin call timeline, charges and what happens on default before you sign.
Questions
Frequently asked questions
Do I have to sell my mutual funds to get the loan?
No. Your units are pledged as security, not sold. They stay in your name, and the lender holds a lien until you repay.
How much loan can I get?
It depends on the value of your units, the fund type and the lender's loan-to-value limit. Lenders usually allow a higher percentage against debt funds than equity funds. Use the calculator for an estimate and confirm the exact limit with the provider.
Can I pledge any mutual fund?
Not always. Lenders accept only approved schemes. Check the provider's list of eligible funds.
What happens if the market falls?
If the value of your pledged units drops, the lender may ask you to add units or repay part of the loan. If you don't, it may sell some units to recover its dues.
Do my funds keep earning while pledged?
The units stay invested, so their value keeps moving with the market. Dividends or other payouts are handled as per the lender's terms.
Is there tax when I pledge units?
Pledging is not a sale, so it does not by itself trigger capital gains. If units are sold to recover the loan, redemption tax rules apply. Speak to a tax professional.
Is it the same as a loan against shares?
The idea is similar, but the securities differ. See our Loan Against Securities page to compare.