neutral
Recently
What Is a Loan Against Mutual Funds and How It Works
LAMF enables investors to pledge mutual-fund units for a loan, retain long-term investment benefits and access liquidity with interest only on utilised amount.
A Loan Against Mutual Funds (LAMF) is a secured credit facility where mutual-fund units are pledged as collateral to access liquidity while investments remain intact. The loan amount depends on the portfolio type and lender-defined Loan-to-Value (LTV) ratio, usually ranging from 45 % for equity schemes to 80 % for debt funds. Lenders charge interest only on the utilised sum, and dividends continue to accrue.
The facility enables investors to manage short-term obligations without redeeming long-term holdings, maintaining exposure to market growth during the loan tenure.