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How Loan Against Mutual Funds Lets Investors Unlock Liquidity Without Selling Units
Loan Against Mutual Funds lets investors borrow against pledged units without selling them, retain returns, and access liquidity via secured overdraft structure.
A Loan Against Mutual Funds (LAMF) allows investors to pledge mutual-fund units as collateral and borrow funds without redeeming them. Lenders typically offer up to 50% of NAV for equity funds and up to 70–90% for debt funds. Interest is charged only on the drawn amount, and the units continue to earn returns while pledged. Eligibility criteria include PAN-linked holdings, KYC compliance and bank account linkage.
Digital platforms enable approvals within minutes and online lien-marking, giving a fast alternative to traditional personal loans when cash-flow needs arise.