Fintracworld

Investors often build mutual fund investments with long-term financial goals in mind. However, an unexpected expense or temporary cash requirement may arise before those investments reach their intended maturity. In such situations, selling mutual fund units is not always the preferred choice. A loan against mutual fund can provide an alternative way to access funds while continuing to hold the underlying investments. This type of borrowing allows eligible investors to use their mutual fund holdings as security for a loan. Instead of immediately redeeming investments, the investor can potentially raise funds against the value of eligible units. The exact loan amount, interest rate, tenure, and other conditions depend on the lender, type of mutual fund, and applicable policies. What Is a Loan Against Mutual Fund? A loan against mutual fund is a secured borrowing facility where eligible mutual fund investments are used as collateral. The lender generally places a lien on the specified m...