Rohit Sharma, a 42-year-old business owner from Pune, had built a mutual fund portfolio worth โน50 lakhs over the past decade. His investments were diversified — 70% in equity funds and 30% in debt funds — all aligned with his long-term wealth-building goals.
One morning, an opportunity knocked — the office space next door was available for lease. Expanding there could double his business capacity.
The only catch? He needed โน20 lakhs within a few days.
Rohit didn’t want to redeem his mutual funds because:
Instead, he discovered a smarter solution — Loan Against Mutual Funds (LAMF).
A Loan Against Mutual Funds is a secured loan where you pledge your mutual fund units as collateral to borrow money.
Unlike redemption, you don’t sell your funds — you just create a temporary lien on them. Your investments remain in your portfolio, continue to earn returns, and are released once the loan is repaid.
It’s an efficient way to access liquidity for short-term goals or emergencies without disturbing your long-term financial plan.
Here’s how the LAMF process works in simple steps, using Rohit’s โน50-lakh portfolio as an example ๐
Rohit approached a financial institution and pledged his mutual fund holdings worth โน50 lakhs. A lien was created on these funds, meaning he couldn’t redeem or switch them until the loan was repaid.
Lenders determine the eligible amount based on the Loan-to-Value (LTV) ratio:
๐ In Rohit’s case:
Rohit decided to take a term loan against mutual funds of โน20 lakhs for 3 years.
Within 24 hours, โน20 lakhs were directly credited to his bank account. His investments continued earning in the background.
Rohit opted for a 36-month EMI plan at an interest rate of 12% p.a.
His EMI came to about โน67,860/month.
Once Rohit repaid the full amount, the lien was removed and his mutual funds were free again.
| Portfolio Type | Value (โน) | LTV (%) | Eligible Loan (โน) |
| Equity Mutual Funds | โน35,00,000 | 50% | โน17,50,000 |
| Debt Mutual Funds | โน15,00,000 | 80% | โน12,00,000 |
| Total Eligible | โน50,00,000 | — | โน29,50,000 |
Rohit borrowed โน20 lakhs out of โน29.5 lakhs eligibility — enough for expansion while keeping his full investment compounding.
| Parameter | Details |
|---|---|
| Loan Amount Range | โน25,000 – โน1 Crore |
| Eligible Collateral | Equity, Debt, Hybrid, or Fund of Funds |
| Loan Against Mutual Funds Interest Rate | 11.9% – 14.5% p.a. |
| Tenure Options | 6 – 84 months |
| Processing Fees | 0.5% (max โน20,000) + โน500 documentation |
| Foreclosure Charges | Nil after 24 EMIs |
| Prompt Payment Rebate | Available for on-time EMI payers |
Most lenders offer quick processing and disbursement — sometimes within 1 working day.
Here’s what makes LAMF a powerful financial planning tool ๐
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Stay Invested: Your portfolio continues to grow.
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Quick Liquidity: Funds credited within hours or a day.
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Tax Efficient: Avoids capital gains tax.
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Flexible Repayment: Tenure up to 7 years.
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Pay Interest Only on Amount Borrowed.
So instead of breaking your investments during a temporary need, you leverage them to your advantage.
When Rohit repaid his โน20-lakh loan after 3 years, his โน50-lakh portfolio had grown to nearly โน62 lakhs thanks to compounding returns.
He met his business goal and preserved his long-term wealth creation — that’s the true power of LAMF.
Whether it’s a business expansion, medical emergency, child’s education, or a personal milestone —
a Loan Against Mutual Funds can provide instant liquidity without disrupting your investment journey.
It’s the modern way to Simplify Your Finance & Amplify Your Future.
Talk to My Niveshak, your trusted financial partner.
We’ll help you assess eligibility, compare interest rates, and guide you through the entire LAMF process — so you can stay invested and still stay liquid.
๐ Contact us today to learn more.