Mutual funds are not just a great investment tool; they can also serve as collateral for securing a loan. A loan against mutual funds (LAMF) allows investors to leverage their existing portfolio to meet financial needs without liquidating their investments. This facility provides quick liquidity while keeping investments intact, ensuring they continue to generate returns.
What is a Loan Against Mutual Funds?
A loan against mutual funds is a secured loan where the borrower pledges their mutual fund units as collateral to avail of credit. Banks and non-banking financial companies (NBFCs) offer this facility, allowing investors to borrow a percentage of the fund’s net asset value (NAV). Unlike personal loans, which often come with high interest rates, LAMF typically offers lower interest rates due to its secured nature.
Steps to Secure a Loan Against Mutual Funds
1. Check Eligibility and Requirements
Before applying for a loan, ensure that your mutual fund holdings qualify as collateral. Generally, both equity and debt mutual funds are accepted, but lenders may impose conditions on the type of funds they accept.
Key eligibility criteria:
The applicant must be the primary holder of the mutual fund units.
The funds should be held in a demat account or with a recognized registrar and transfer agent (RTA) like CAMS or Karvy.
The minimum value of pledged funds should meet the lender’s requirements.
2. Choose a Lender
Different banks and NBFCs offer loans against mutual funds with varying terms. Compare interest rates, loan-to-value (LTV) ratios, processing fees, and repayment terms before selecting a lender. Some financial institutions provide an online process, making it more convenient.
3. Apply for the Loan
Once you select a lender, initiate the loan application process. This typically involves:
Submitting identity and address proof (Aadhaar, PAN, passport, etc.).
Providing details of your mutual fund holdings.
Executing an agreement with the lender authorizing the pledge of mutual fund units.
The lender will then verify the details and approve the loan based on the value of your pledged funds.
4. Pledge Mutual Fund Units
After loan approval, your mutual fund units will be marked as pledged with the lender. This process is done via RTAs or the depository (if held in demat form). You will not be able to redeem or sell these units unless the loan is repaid or the lender releases them.
5. Receive Loan Amount
Once the pledge is confirmed, the sanctioned loan amount is credited to your bank account. The loan amount typically ranges from 50% to 80% of the NAV for equity funds and up to 90% for debt funds.
Features and Benefits of Loan Against Mutual Funds
Lower Interest Rates – Compared to personal loans and credit cards, LAMF offers lower interest rates, making it a cost-effective borrowing option.
Retain Investment Benefits – Your pledged mutual funds continue to earn returns and appreciate in value while you use the loan.
Quick Processing – Many lenders offer instant approvals and quick disbursement, especially if the funds are held in demat form.
Flexible Repayment Options – Borrowers can choose to pay interest monthly and repay the principal later, offering better financial flexibility.
No Prepayment Penalty – Some lenders allow early repayment without additional charges, reducing the overall cost of borrowing.
Risks and Considerations
While a loan against mutual funds has many benefits, there are some risks to consider:
Market Volatility: The value of your pledged mutual fund units fluctuates with market movements. If the NAV drops significantly, the lender may ask for additional collateral or partial repayment.
LTV Ratio Limitations: Lenders may restrict the loan amount to a certain percentage of the NAV, which may not always cover your financial requirements.
Loss of Control Over Pledged Units: While you continue to earn returns, you cannot redeem or switch pledged mutual funds until the loan is repaid.
Risk of Liquidation: In case of default, the lender can sell your pledged units to recover the outstanding amount.
Conclusion
A loan against mutual funds is a smart way to access funds without disrupting your investment strategy. It provides liquidity at lower interest rates, making it an attractive alternative to personal loans. However, borrowers must carefully evaluate their repayment capacity and market risks before opting for this facility. Choosing the right lender and understanding the terms of the loan can help maximize benefits while minimizing financial stress.
Franck Muller Cintrée Curvex Remember
Franck Muller unveiled the new additions to their Remember collection at the Substantive Haute Horlogerie (WPHH). All these luxury replica watches look common at first glance. Until you notice that the actual hands rotate counterclockwise. Though the numbers don’t seem appropriate either - in reverse obtain. And there are ghost numbers… In the game of “sometimes I realize you, sometimes I don’t view you”, time moves onward even as the hands transfer backwards. The Franck Muller Cintrée Curvex Remember see presents a romantic complication that is certainly unique in the world of horology. This particular review is dedicated to birthday boys.
Review of the particular Franck Muller Cintrée Curvex Remember The 3rd party brand breaks the shape by displaying time counterclockwise. This is not the first time that Franck Muller has broken along with centuries of classic period display. The numbers about the dial of the Crazy Time watch are arranged in the (not) random order. Franck Muller is completely independent as well as owns all disciplines (referring to the dial themes) inside company, so it can easily receive creative. Without the need for an outer company, it can create unlimited variations.
Cintrée Curvex The tonneau-shaped case is not new in the business, it has been around for years. Even so the Franck Muller Cintrée Curvex case is a striking agreement of this design. The prosperous and sensual lines and this also specific proportion are tightly associated with the Geneva brand.
The diamond-set Franck Muller Cintrée Curvex Remember 2850 is 43 mm in length. The gorgeous 18 carat rose gold case is set together with diamonds. The Ref. 7880 is quite a bit bigger , 50 mm, also within 18k rose gold. The two swiss replica watches are exactly the same inside design and construction, merely in size.
The highly polished event has no demarcated bezel, plus the one-piece design is an benefit from the case shape. But it also helps make machining and processing tougher. The case is covered having a curved sapphire that fits the elegant case traces.
The crown teeth of both watches are very similar: the Franck Muller emblem is printed on the elevated base. The grip feels at any time good, and time placing and winding are simple. Of course , you have to get used to typically the strange inverted time screen first.
Reminiscences of the past As soon as you get used to the passage of your energy in the " other" route, the eye catches some ghostly numbers in certain lighting and also angles. But these are not a short while ago of the past, but reminiscences. The name " memories" is incredibly suggestive. No matter the direction from the hands, time passes further more. No matter the memory, the present is actually powerful. The bold quantities of the present are always there, while arrival of memories features a twist - the transforming of the hands. high quality replica watches
The Franck Muller Group manufactures the dials at Arnold Linder LA. The ghost effect will be achieved by continuous rubber stamping. 200 tons of pressure are more comfortable with create this magical appearance. The final pattern is also reached by stamping.
The large and beautiful Persia numerals are engraved yourself. The numbers are trim, coated and inked. This specific meticulous method requires a regular hand, but the result is niagra three-dimensional appearance.
The simple three-hand time show uses gold leaf arms. Luminous treatment makes the moment legible in low-light situations, but only the owner could know the " exact time". The hands are twisted by hand to fit the rounded crystal.
The manufacturer name is printed over a dial and below the switch.
Like the upcoming - hidden Typically the Franck Muller Cintrée Curvex Remember is a metaphorical replica swiss watches . Just as the future is undetectable from our eyes, often the Calibre FM 2800 INV is placed under a sealed caseback. The future movement features a shape, not to be seen while using eyes. What we see is simply the result - time is completing. Even when the hands switch counterclockwise, time is dancing.
The Calibre FM 2800 INV activity is placed under a solid precious metal caseback. The curved material is engraved with the brand's typical inscriptions, as well as the phrases " Time to Remember".
The in-house automatic winding movement vibrates 28, 800 times per hour (4Hz) and has a power reserve involving 42 hours. The mobility is beautifully decorated: Côtes de Genève and sunray on the bridges and one, circular graining on the isn't stable of the baseplate, diamond perfecting on the chamfers, 24k rare metal rhodiuming, 24k gold polishing off on the engravings, circular scrubbing on the rotor, sunray brushing and flossing on the drum barrel, 45° polishing and sunray cleaning on the ratchet, polished along with blued screws. Jacob and Co. Astronomia Casino replica
Remember the Time Franck Muller Cintrée Curvex Remember is a gorgeous piece using a deep meaning. From the exclusive time display and recollection dial to the message personalized on the caseback, these designer watches are full of metaphors. Everyone has their unique understanding and interpretation in the watch's message.
Both versions, Ref 2850 and Ref. 7880, are generally comfortable to wear due to their curved layout. Franck Muller promotes Recall as a unisex watch, without having attachments to express gender, apart from diamonds (which can be considered far more feminine).
Personally, Cintrée Curvex Remember includes a special symbolic meaning: whether or not I look back, time period always flows in the similar direction - to the long term. We can turn back time, nevertheless we cannot turn back time frame. Memories of the past are normally there. We can choose to see these people or abstract them. However the past is always there. I truly do not see them while scars of the past, but since the foundation of the future. Franck Muller replica
Franck Muller Cintrée Curvex Remember Technical specifications Reference
2850 B SC in REM D 7880 B SC AT REM Case
18K rose gold Span Reference 2850: 43 mm Reference 7880: 50 mm Water-resistant to 30 meters Functions
CCW, CCW, CCW Activity
FM2800 inverter Automatic mechanical motion Ø 26. thirty mm x height: several. 60 mm 36, 800 vibrations per hour 42-hour power reserve thirty-one components - 25 gems Movement decoration
Côtes de Genève and sunray finish about bridges and oscillating fat Circular graining on both the sides of baseplate Diamond polished chamfers 24k gold bath in addition to rhodium treatment Engravings in 24k Gold end Circular brushing for the reason that rotor rolls Sunray brushing on the drum 45° polishing and sunray brushing on the ratchet Polished and blued anchoring screws Dial
Lacquered sun-stamped guilloché call with holographic numerals, brought up Arabic numerals Secure
Hand-stitched crocodile strap