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Loan Against Mutual Funds: Where & How to Apply for it safely?

Big or small, a financial crisis can knock on your doorstep unannounced at any time, sending you into a dire situation where you need cash fast but lack the means by which to obtain it. Things can get really tight if you have no assets to bail you out, and that’s where a loan against mutual funds from lenders such as Abhi Loans proves the beacon of light at the end of the tunnel. However, for first-time borrowers, such loan arrangements may be plagued by uncertainties, and misconceptions, which may lead to questions about how to go about a loan against mutual funds and if they are safe to take in the first place. Not to worry as we answer your most pressing concerns now.

How To Apply For a Loan Against Your Mutual Fund Units?

Depending on who you approach, there are fundamentally three ways you can apply for a loan against mutual funds, namely: 

  • Offline 
  • Online 
  • Hybrid

An offline process entails having to visit a physical lender at their premises. They internally initiate a host of manual proceedings which requires you to physically submit the necessary documentation to qualify your loan. Other times, the process may entwine a mix of online procedures that have to be rounded off by an in-person visit to your lender. The problem with these methodologies though is that, besides being tedious, they can be lengthy with poor turnaround times of up to 3 weeks. 

Ideally, you want a lender who offers a fully digital, online process which enables you to apply from home for quick loan against mutual funds. One such lender is Abhi Loans. The company alleviates all manual processes, which enables quick disbursal within 24 hours. 

How do I get Loan Against Mutual Fund Units?

Now, let’s dive deeper into how the online application process for a quick loan against mutual fund units works at Abhi Loans, which will serve as our example today. Before that though, you’ll need to fulfill a few checkmarks. First, you have to have mutual funds units that are single-held, in other words, your MF units are not jointly owned. Secondly, you’ll need to have your mutual fund portfolio with CAMS. 

So here’s how you get your loan against mutual fund units from Abhi Loans: 

  • With your Aadhar-linked mobile number, log into the website
  • Sign in to your Digilocker to finish your KYC or upload the documents anew
  • Mark a lien on your mutual fund units to qualify for a loan starting from 15K

Once you complete the processes, Abhi Loans will disburse the money to you in just 1 working day, with a promise of a 50% waiver on processing fees as an assurance that they will keep their end of the bargain as promised. 

Is Going With a Digital Loan Against a Mutual Fund Safe?

Yes. It is absolutely safe if you choose your loan against mutual funds provider wisely. Avoid loan sharks by all means and instead turn to a proven, and regulated provider in the field with an experience-laden track record. 

If you get your loan from a loan shark or an unlicensed moneylender, you’ll put yourself at risk of: 

  • Extremely high-interest rates
  • Being pressured into an endless borrowing cycle to repay your loans
  • Getting loans on mutual funds on very bad terms
  • Being harassed when you fall back on your payments

One loan against mutual fund provider you can trust for a safe digital loan on mutual funds is Abhi Loans. They have flexible loan tenures, are licensed hence regulated, and boast a history of instant loans and courteous service. You can trust Abhi Loans to hold your mutual funds unit for you safely, so you’ll continue benefiting from your long-term investments even as you get a loan on your MF units. 

What May Be the Interest Rate To Avail Loan Against a Mutual Fund?

The interest rate levied upon your loan will vary depending on a few factors, some of which include: 

  • The type of lender: Certain NBFCs can offer interest rates anywhere between 12% and 24% for your loan
  • Loan tenure: Your interest rate will also be determined by the length of your payment cycle
  • Loan terms and your credit scores could also have a say if you approach a bank

With a lender such as Abhi Loans, the interest rates are quite fair compared to the rest of the market. They offer a competitive interest rate of 13% when you take out a loan greater than Rs 500,000 and 15-16% for lower amounts. The best part about a loan against mutual fund units from Abhi Loans is that you can pay just the interest due on your loan amount every month.  

Best Way To Apply Loan Against Your Mutual Fund Units

There are options galore at your disposal when it comes to applying for your loan against mutual funds, no doubt about that. You can choose to approach banks or NBFCs (non-bank financial companies), which make up the two primary forms of application. 

The problem with applying for your loan through a bank though is that: 

  • Banks discriminate based on your credit profile
  • The average processing duration is lengthy, sometimes taking up to as much as 2 weeks
  • Some banks have a really high lower loan limit on mutual funds
  • Banks provide loans often only to existing, long-time customers 

Banks aside, not all NBFCs can be spoken of either in glowing terms. Some rely on mostly manual processes with turnaround times of 3 to 5 days. While commendable, there’s an even better option when you turn to a fully digital NBFC loan provider such as Abhi Loans. The company has completely digitalized its processes, ensuring you can get quick money on mutual funds units within 24 hours only, which makes this one of the best ways to apply for this type of loan

Takeaways

In a nutshell, loans against mutual funds units are perfectly safe to apply for once you know who and where to turn to. With a reliable provider like Abhi Loans at your beck and call, trust that your mutual fund units remain safe throughout your loan tenure and will continue bringing in dividends. Moreover, the best way to apply is online via a fully digital loan provider that offers you the convenience to apply loan from home on mutual fund. If you need money fast from your mutual fund units and would like a loan provider that ticks all the right boxes, we recommend Abhi Loans. Visit the Abhi Loans website to apply.

About Ambika Taylor

Myself Ambika Taylor. I am admin of https://hammburg.com/. For any business query, you can contact me at [email protected]