When financial needs arise, two commonly considered options are Loans Against Mutual Funds (LAMF) and Personal Loans.
In this blog, we explore the Let’s check out the differences, advantages, and drawbacks of loans against mutual funds as well as personal loansthese financial instruments to help you make an informed borrowing decision. Let’s get started!
LAMF is a financial product where you pledge your mutual fund units as collateral to secure a loan from a bank or financial institution. It allows you to access funds while keeping your investments intact.
A Personal Loan is an unsecured loan that you can obtain from banks, credit unions, or online lenders. Unlike LAMF, it doesn't require collateral, but it's typically based on your creditworthiness and income.
Here are some of the main differences between a loan against mutual fund and personal loan across some key factors:
Both Loans Against Mutual Funds and Personal Loans offer financial flexibility, but they cater to different needs and come with distinct advantages and drawbacks. Your choice should align with your financial goals, creditworthiness, and ability to manage repayments.
When an immediate financial need arises, you need a loan option that is quick, cost-efficient, and comes with minimal paperwork. That’s where Fi Money steps in. Fi Money provides instant loans that arrive directly in your savings account. These are pre-approved personal loans made available to select users with good credit scores. On Fi, this process is 100% paperless, and the loans are provided at competitive interest rates — where each user remains in control with complete visibility of all details. Plus, you can avoid EMI late fees by setting up automatic in-app payments. Our licensed partner bank assigns an eligible loan amount to each user (up to ₹5 lakh).
The eligibility criteria for LAMF depends on the type of mutual fund, the number of mutual fund units you own, your credit score, and annual income. For personal loans, eligibility factors include credit score, income, and repayment capacity.
The LTV ratio depends on the mutual fund's NAV, usually offering a lower percentage of the NAV as the loan amount. Usually, personal Loans can provide higher, more flexible loan amounts depending on your financial profile.
LAMF generally offers lower interest rates due to the collateral involved, as compared to personal loans that are unsecured.
Generally, there are no tax implications (benefits or liabilities) when you take a loan against mutual funds or a personal loan.
LAMF repayment is usually done via EMIs, and if not paid, the mutual fund units may be liquidated. There is no asset liquidation involved in personal loans.
Products on our platform | Details |
---|---|
Unified Payments Interface (UPI) | Epifi Technologies Pvt. Ltd ('Epifi Tech') is a Third-Party App Provider ('TPAP') - and acts as a service provider and participates in UPI through a Payment Service Provider ('PSP') Bank (Federal Bank). |
Savings Account and Deposits | Federal Bank offers savings account, fixed deposits and smart deposits to users on the Fi App (through Epifi Tech). Users' savings account and deposits are securely opened with Federal Bank. |
Cards | Fi Brand Pvt. Ltd. markets and distributes co-branded cards in partnership with Federal Bank and Visa. Cards are issued by Federal Bank. |
Loans | Epifi Tech facilitates loan distribution and acts as a lending service provider and/or digital lending application for various Banks, registered NBFCs and NBFC-P2P ('Lenders') List of Lenders. |
Mutual Funds | Epifi Wealth Pvt. Ltd. ('Epifi Wealth') is a registered investment adviser and provides a platform for mutual funds investment. Epifi Wealth has partnered with MFCentral to provide mutual funds analyser to users. |
Loans Against Mutual Funds | Epifi Tech in partnership with regulated entities including Epifi Wealth and Bajaj Finserv provides a platform for loans against mutual funds. |
US Stocks | Epifi Tech has partnered with US stock broker Alpaca Securities LLC to provide users the option to invest in US stocks. |
Connected Accounts | Epifi Wealth (as a financial information user), in partnership with Finvu and Onemoney, provides users the option to link their existing financial accounts on Fi. |
Credit Analyser | Epifi Tech (as a non-specified user) in partnership with Experian and CIBIL provides insights on users' credit scores |
Fi-Coins | Fi-Coins are earned under a reward programme for engaging with products and services on the Fi App. |
Fi Store | Fi-Coins can be redeemed on products and services listed on Fi Store such as merchandise, gift cards, air miles, among other things. |
1. Net Worth: Helps users get a view of their financial Net Worth — in accordance with their assets & liabilities
2. Wealth Maximiser: Analyses your finances, shares financial reports to make informed money decisions
These products are governed by our Terms and Conditions, Privacy Policy, and any other product and partner specific terms and conditions as communicated to you.
©epiFi Technologies Pvt. Ltd. 2025
Fi is a money management platform that offers the perfect solution for all your financial needs. The Federal Bank Savings Account offered through Fi is an online savings account that you can open in 3 minutes! It goes beyond online account opening, as it has helped reimagine the banking experience in India
Through Fi, you can do more: apply for an instant personal loan, pick from many types of Mutual Funds, select the best SIP to invest in US Stocks, apply for a forex-free Debit Card (works for select account plans) to use while travelling abroad, analyse/improve their portfolio, get a 360-degree view of your spend insights and take steps building wealth.
You can also utilise Fi's free personal loan resources, such as the Personal Loan and EMI calculator, before proceeding to the quick loan application process. All of this is why over 35 lakh Indians feel that Fi is the only financial app you will ever need.