How to get loan against mutual fund
Loan against Mutual Funds: Many times there is a sudden need for money, due to which people have to withdraw money from their savings or investments. If you too suddenly need money and you are planning to withdraw money from your mutual funds, then you can also change your plan. Yes, if you invest in mutual funds and you suddenly need money, then you can take a loan against your mutual fund.
Many banks in the country provide loans against mutual funds at interest rates of 10 to 15 percent. Let us tell you that if you have an equity mutual fund, you will have to pledge 50 percent margin of its value. If you have a debt mutual fund, you will have to pledge 25 percent margin.
Eligibility
To take a loan against mutual funds, first of all you must have a savings account. The PAN number given in your savings account and the PAN number given for the mutual fund should be the same. Now you have to contact your bank. Every bank has a list of mutual fund houses. If the name of your fund house is also included in that list, then you can get a loan.
how to apply
You can take a loan online by visiting the bank’s website and entering the necessary details related to your mutual funds. Apart from this, you can also visit your bank branch and apply for a loan.
When to take a loan
Take a loan against mutual funds only when you are in dire need of money and you have no other option. Along with this, you should be sure that you can repay this loan as soon as possible. Keep in mind that the amount of loan taken against mutual funds should not be very large and the tenure of this loan should also be short.
When should you not take a loan
If you want to take a loan against equity mutual funds, you will have to pledge at least 50% of the loan value as margin. However, when the stock market starts fluctuating, this margin may get exhausted soon. In such cases, the bank may ask you to pledge more mutual funds or may even decide to sell a part of your investment.
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