Digital Loans Against MFs For HDFC Bank Customers: Know How To Avail It?

As a special offering, HDFC customers can now avail digital loans against their mutual fund holdings as the private sector in a tie-up with CAMS is extending this financing facility.
The facility has been made online or digital for the first time by the leading lender.

Digital Loans Against MFs For HDFC Bank Customers: Know How To Avail It?

So, in case you too are in need of some ready cash, here is the process with all the steps:

1. You as an account holder with the bank need to login through the net-banking facility into myCAMS and choose the mutual funds who wish to hypothecate with the banker.

2. Give your consent to the terms and conditions listed thereon

3. And as a last step provide in the one-time password which you receive for validation. Hereafter, the overdraft facility will be extended to you.

But before you finally take the loan do consider parameters such as interest payable and other such important considerations:

Interest rate on such loan is usually based on the bank's marginal-cost of funds based lending rate plus the mark up rate. The cost of servicing such a loan usually comes at around 11%

Amount of loan you can source from the option: Usually, the loan amount is based on the NAV of the funds you give in for pledging and usually it ranges in between 50-70% of the NAV value in most cases with the lenders. It is to be noted that while you have lent funds against mutual fund units, you as an investor in these funds are entitled to all benefits including dividend and bonus.

Loan processing fee and other charges: The overdraft facility extended with this type of financing comes with a processing fee which is usually pegged at 0.75% of the loan value. But in the current scheme, the bank is extending the offer at a price of Rs. 1, 499 for every customer.

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bank's marginal-cost of funds based lending rate plus the mark up rate. The cost of servicing such a loan usually comes at around 11%

Amount of loan you can source from the option: Usually, the loan amount is based on the NAV of the funds you give in for pledging and usually it ranges in between 50-70% of the NAV value in most cases with the lenders. It is to be noted that while you have lent funds against mutual fund units, you as an investor in these funds are entitled to all benefits including dividend and bonus.

Loan processing fee and other charges: The overdraft facility extended with this type of financing comes with a processing fee which is usually pegged at 0.75% of the loan value. But in the current scheme, the bank is extending the offer at a price of Rs. 1, 499 for every customer.

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