Obtaining a loan against your mutual fund investments can be a smart financial move if you require emergency funds. However, there’s a catch. Not every applicant and every mutual fund qualifies for the credit facility. So, before you apply, you need to check the loan against mutual funds eligibility criteria.
In this blog, we cover the basic aspects of eligibility for a loan against mutual funds.
The exact parameters used to determine an applicant’s loan against mutual funds eligibility may differ from one bank or NBFC to another. However, the broad criteria considered include the following.
Before you apply for the LAMF facility, you need to know what the loan against mutual funds eligibility criteria are. Here are 4 different ways via which you can check if you are eligible for a loan against mutual funds.
Every bank and lending institution has its own set of criteria to determine your loan against mutual funds eligibility. You can visit the website of your preferred bank or NBFC to check whether you and the funds you’ve invested in qualify.
If you have a prior banking relationship, you can get in touch with your bank and enquire about your eligibility for a loan against mutual funds. Your bank’s customer support team can give you more clarity about whether or not they offer this facility and if you are eligible for the same.
You can even reach out to your mutual fund house or asset management company (AMC) to check if they have collaborated with any bank or NBFC. These tie-ups may make it easier for you to obtain a loan against your eligible mutual fund investments.
If you need further assistance, you can consult a financial advisor for more clarity on the loan against mutual funds eligibility criteria. In case you do not qualify, you can even obtain expert guidance on the steps you can take to become eligible for the LAMF facility.
The list of criteria for loan against mutual funds eligibility tends to vary slightly from one bank or financial institution to another. Make sure you read the terms and conditions to check if you qualify before you plan your borrowings. If your mutual fund scheme is not eligible to be offered as collateral, you can apply for other credit facilities instead.
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The loan against mutual funds eligibility criteria generally include the applicant’s age, nationality, and credit score. Above all, the type of mutual fund held matters.
Lenders may require you to have a specific minimum investment in mutual funds to be eligible for a loan.
Yes, most banks and NBFCs have specific age criteria to determine an applicant’s loan against mutual funds eligibility.
Since a loan against mutual funds is a secured loan, you may be able to avail of this facility even if your credit score is slightly lower. However, the credit score required depends on the lender.
The eligibility criteria may vary only slightly from one lender to another. In most cases, the bank or NBFC looks at the applicant’s age, nationality, credit score and mutual fund investments.