Loan against mutual funds?

[theglobalinvestor]

Has anyone taken a loan against mutual funds? Most of these seem to actually offer an overdraft facility and interest is charged only on utilised amount for period of borrowing. The only real cost of having this facility and not using it is approx ₹1000/year processing/renewal fees. Seems like a low cost overdraft option to me. Thoughts and anyone with experience?

HDFC - https://www.hdfcbank.com/personal/b...igital-loan-against-mutual-funds-mutual-funds
ICICI - https://www.icicibank.com/personal-banking/loans/loan-against-securities/mutual-funds

 

[ankushanup1]

not taken but have done some digging earlier during pandemic so have some basic info
so there is a cap on value of loan you could get like 60% of net nav under your pan for a select list of mutual funds approved by banks
so most top schemes like largecap to bluechip from leading fund houses with at least 5yrs history and less volatile funds are generally considered for the selected list
exposure to banking or financial stocks would generally have a higher haircut (although don't make sense)
It's easy to do pledge and pledge digitally with cdsl/nsdl/cams etc but don't know exactly about hdfc /icici
once pledged the funds would be transferred to OD or savings acc in 24hrs and can be withdrawn in any no of tranches and yes interest is accured only as per used funds
There would be one time processing charges ranging approximately 1.5% of funds
The pledged mfs can't be sold or used against any other form of funding or nrv /trv etc purpose
only interest needs to be serviced monthly just like gold loan and loan is a term loan of usually 1yr and needs renewal
Bullet payments can be made or prepayment is allowed at any time without any charges
There would also be some nominal additional charges for pledging unpledgeing

 

[iamdhamo]

Interest is close to personal loan interest and hence if we have gold we can pledge gold and get loan than this for saving 2 to 3%

 

[Knab]

If you're considering a loan against your mutual funds, it's crucial to understand the terms and conditions offered by different lenders. You can find more information on this topic, including how to assess if this type of loan is suitable for your financial needs, To know more checkout abhiloans website.

 

[iamdhamo]

If you're considering a loan against your mutual funds, it's crucial to understand the terms and conditions offered by different lenders. You can find more information on this topic, including how to assess if this type of loan is suitable for your financial needs, To know more checkout abhiloans website.

Will check n see

 

[prankster]

Also, this type of loan is not reported in cibil afaik