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Investing in mutual funds is a smart way to build long term wealth, but financial emergencies can arise when you need immediate access to cash. Instead of redeeming your investments and disrupting your financial goals, you can opt for a loan against mutual fund.
A loan against mutual funds allows investors to pledge their mutual fund units as collateral and borrow funds without selling their investments. This enables you to meet short-term financial needs while continuing to benefit from potential market growth.
Today, several Non-Banking Financial Companies (NBFCs) offer quick and convenient loan facilities against mutual fund holdings. Many of them provide a completely digital process through an instant loan app, making borrowing faster and more accessible.
Top NBFCs Offering Loan Against Mutual Funds
1. Fibe
Fibe is emerging as one of the preferred digital lending platforms for investors seeking fast access to funds. Through its seamless online process, eligible users can apply for a loan against mutual funds without lengthy paperwork or branch visits.
The Fibe app offers a user-friendly experience, allowing borrowers to complete the application process, upload documents, and track their loan status digitally.
Key features of Fibe:
- 100% digital application process
- Minimal documentation
- Fast approvals and quick disbursals
- Flexible repayment options
- Zero foreclosure charges
- Easy loan management through the Fibe app
For investors looking for convenience and speed, Fibe combines the benefits of a loan against mutual fund with the ease of an instant loan app.
2. IIFL Finance
IIFL Finance offers loans against a wide range of approved mutual fund schemes. Borrowers can access funds through an overdraft facility, allowing them to pay interest only on the amount utilised.
3. Tata Capital
Tata Capital provides loans against mutual funds under its Loan Against Securities offering. The company enables customers to pledge eligible mutual fund units and access funds through a simple application process.
4. DSP Finance
DSP Finance offers a fully digital loan against mutual funds solution with flexible borrowing limits. Investors can apply online and receive access to funds without liquidating their investments.
5. Piramal Finance
Piramal Finance offers loans against financial securities, including mutual funds. The company provides flexible borrowing options and digital application support for eligible investors.
Benefits of Taking a Loan Against Mutual Funds
Choosing a loan against mutual funds offers several advantages:
- Continue participating in market growth
- Avoid capital gains tax triggered by redemption
- Prevent disruption to long-term investment goals
- Access funds quickly during emergencies
- Benefit from lower interest rates compared to unsecured loans
- Enjoy flexible repayment options
How Does It Work?
The process is simple:
- Choose a lender offering a loan against mutual funds.
- Check whether your mutual fund schemes are eligible.
- Pledge your mutual fund units through the lender’s platform.
- Complete the KYC and documentation process.
- Receive the approved loan amount in your account.
The loan amount depends on the type and value of your mutual fund holdings. Typically, lenders offer up to 50% of the value of equity mutual funds and up to 80% of debt mutual funds, subject to regulatory guidelines.
Why Consider Fibe?
Among the available NBFCs, Fibe stands out for its digital-first approach, minimal paperwork, and customer-friendly features. Its instant loan app simplifies the borrowing journey and enables eligible investors to access funds quickly while keeping their investments intact.
Before applying, compare interest rates, processing fees, eligible schemes, and repayment terms to select the lender that best suits your financial needs.
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