Overdraft Against MUTUAL FUNDS

Overdraft against mutual funds provide investors with an effective tool to access funds quickly and conveniently while preserving their investment portfolio. By leveraging the value of their mutual fund holdings, individuals can meet their financial goals and address emergencies without disrupting their original investment plan.

  • Instant LAMF limit within minutes
  • Interest rate at 10.5% p.a. (FLAT)
  • Large list of approved mutual funds
  • 100% Digital Process
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Feature and Benefits

Overdraft against mutual funds, also known as securities-based lending, involve using your mutual fund holdings as collateral to secure a credit line from a financial institution. Instead of selling your mutual funds, which may have potential for future growth, you retain ownership of your securities while accessing the funds you require. The credit amount is typically determined based on the value and liquidity of the mutual funds being pledged.

  • Online KYC on Digilocker
  • No CIBIL Check
  • Online OTP based pledge process
  • ROI 10.5% (Flat) p.a
  • Retain ownership
  • Flexible use of Fund
  • Loans against more than 5000 MF Schemes.
  • Loan amount Min. Rs.25,000 & Max. Rs.5,00,00,000
  • There are no charges
  • Maximum tenure of loan is 12 months
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How to Apply

  • 1 Type of Loan and Apply
  • 2 Complete KYC registration with PAN & Aadhar details
  • 3 Pledge securities as collateral for secured loans
  • 4 Verify your bank account online via e-mandate
  • 5 Read & Sign loan agreement online with OTP authentication
  • 6 Get Loan in your Bank account

How to Apply

1 Select Type of Loan and Apply
2 Complete KYC registration with PAN & Aadhar details
3 Pledge securities as collateral for secured loans
4 Verify your bank account online via e-mandate
5 Read & Sign loan agreement online with OTP authentication
6 Get Loan in your Bank account

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Frequently asked questions

A loan against mutual funds is a type of loan where you pledge your mutual fund units as collateral to obtain funds from the lender.Your mutual funds will continue to earn returns ,but you cannot sell them while they are pledged.

When you pledge an asset ,you are offering it as a security to the lender in exchange of the loan amount.By pledging the borrower gives the lender the right to take ownership of the assets if the borrower fails to repay the loan as per the agreed terms and condition.

Lien marking refers to the process of marking or freezing the pledged securities in the borrower’s account.By placing a lien on the securities,the lender protects their interest in the collateral.If the borrower defaults on the loan,the lender has the right to sell the pledged securities to recover the outstanding loan amount.

Loan against mutual funds is available for mutual funds offered by various assets management companies(AMCs)in India. However ,Equity Linked Saving Scheme(ELSS) funds with a date of purchase of less than 3 years are not eligible for loan.

You may check the List of scheme in our Eligibility Page.

Yes, we at Lark allow the borrower to lien mark the mutual funds of their choice in their portfolio. The borrower can change the schemes and units and have their own allocation for lien marking.

Once the borrower repays the full loan amount we un lien mark the securities.

If market value of Mutual fund fall, the borrower will be informed about the margin shortage, the margin should be maintained all the time as per the LTV calculations. The short margin can be fulfilled either by repaying the Loan or pledging more Mutual Fund in favour of Lender. If market value of shares falls below bare minimum margin criteria, the lender can invoke the securities.