Loan Against Mutual Funds (LAMF) offers a smart way to access funds without liquidating your investments. Since it's a secured loan, it comes with attractive benefits for mutual fund investors.
Key Benefits:
- Lower Interest Rates: LAMF typically offers lower interest rates compared to personal loans because it is a secured loan.
- Retain Ownership of Mutual Funds: You don't need to sell your investments. You continue to earn returns (like dividends or NAV appreciation) on the pledged mutual fund units.
- Flexible Loan Amount: Loan value depends on the mutual fund's value. Usually, up to 40%-45% of the fund's value can be availed as a loan.
- Ideal for Short-term Liquidity: A good option for managing temporary cash flow issues without disrupting your long-term investment plans.
- Online Management: If your funds are held with online platforms, the entire process pledge, disbursal, and repayment can often be done online.
Access liquidity conveniently while staying invested in mutual funds.