Check eligibility
Identify whether your mutual fund holdings are eligible and understand the indicative borrowing limit available against them.
MMC Financial Services
Borrow Smartly
Explore how eligible mutual fund investments may help meet a borrowing need, while keeping the decision connected to your wider financial plan.
Growing Wealth. Protecting Futures.
Loan Against Mutual Funds
Access liquidity without automatically redeeming investments
A Loan Against Mutual Funds (LAMF) is a borrowing facility in which eligible mutual fund investments are offered as security. Depending on the lender and eligible holdings, it may provide access to funds without immediately selling those investments.
The important question is not simply whether a loan is available, but whether the borrowing purpose, cost and repayment obligation make sense for your overall financial situation.
BORROW SMARTLY
Your investments can support liquidity needs — with conditions.
Eligibility, loan limits, interest, charges and other terms vary by lender. The underlying mutual fund investment also remains market-linked.
How It Works
A simple way to understand LAMF
The exact process differs by provider, but the journey generally involves these steps.
Pledge eligible assets
Eligible mutual fund units are pledged as security under the applicable lender and facility terms.
Complete the required process
Complete KYC, documentation and other steps required by the lending provider before the facility is activated.
Access and repay
Use the approved facility as needed and keep interest and repayment obligations in view throughout the borrowing period.
Why Consider It?
A liquidity option for the right situation
A LAMF facility may be considered when accessing liquidity is important and an investor wants to evaluate borrowing alongside the alternative of redeeming investments.
- May help meet a temporary liquidity requirement without an immediate redemption of eligible investments.
- Can be considered when keeping the long-term investment strategy under review is important.
- May provide flexibility because interest is generally linked to the amount utilised, subject to the provider's terms.
- Should be evaluated against the cost and repayment obligation before proceeding.
A practical question
Should you borrow or redeem?
The answer depends on the purpose of the money, the cost of borrowing, your expected repayment timeline, the investments involved and your broader financial plan.
Comparing both options before acting can help you make a more informed decision.
Important Considerations
Understand the obligations before borrowing
Loan Against Mutual Funds is not a risk-free alternative to redemption. The facility should be understood on its own terms.
- Interest cost: borrowing carries an interest cost and any applicable charges.
- Eligibility: not every mutual fund or holding may qualify, and limits vary.
- Market movement: mutual fund values can rise or fall while units are pledged.
- Repayment: repayment obligations continue according to the facility terms.
- Provider terms: charges, tenure, limits, documentation and other conditions depend on the lender.
- Investment purpose: borrowing should be connected to a genuine need and considered within the wider financial plan.
How MMC Can Help
Make the borrowing decision with a wider view
MMC can help you understand the key questions around a Loan Against Mutual Funds facility and how the decision relates to your existing investments and financial priorities.
01
Understand the facility
Clarify the basic structure, costs, eligibility and obligations.
02
Compare the alternatives
Consider borrowing alongside the option of redeeming investments.
03
Keep the long term in view
Consider the borrowing decision alongside your broader financial goals.
Have a Question?
Let's discuss your borrowing requirement.
Tell us what you are considering. We can help you understand the questions to ask before taking the next step.