As an asset, securities are often used to seek a loan against them. Today, if you are in need of an instant loan, you can avail it just using your net banking facility against your mutual fund units.
These loans are perfect for your short-term and urgent needs. Additionally, you need not stop your SIPs or redeem your mutual fund investments when you are in urgent need of money. You can instead avail an instant loan online against them.
- Your banker should have a tie-up with the mutual fund registrar to be able to give you a loan against your mutual fund units.
- You need to have access to net banking (for your bank account) and your mutual fund registrar's portal (CAMS).
- The margin for fixed income securities is up to 15 percent, whereas it will be up to 50 percent for equity funds usually.
- Even if you have no credit history, you can avail this loan.
- List of mutual fund schemes eligible to avail the facility is decided by the bank.
Steps to apply for a loan against mutual fund units online:
- Go to your bank's website and click on the "loan against mutual fund" option. Following this login into your net banking account.
- Fill online form for the loan. The form will seek your KYC details. Your name, email, and aadhaar should be auto-filled. Check the correctness and read all the terms and conditions before clicking proceed.
- On clicking proceed in the step above, you will be led to the myCAMS portal. Fill out your login details and enter. Choose the fund holding from the list displayed.
- The loan eligible against the chosen mutual fund will be calculated.
- Once you are said to be eligible, a current account will be created for you and the chosen units will be marked as a lien for security.
- You can now use your current account for the overdraft facility.