You have probably heard about Loan against Securities but do you know that you can now secure Digital Loan Against Mutual Funds without having to go to through endless paperwork? Introduced by the HDFC Bank, it has come up to be one of the most popular loan products since you no more need to liquidate your Mutual Fund holdings in order to have access to funds.
With Digital Loan Against Mutual Funds, you need not sacrifice the earnings on a Mutual Fund to meet financial requirements. Loan Against Mutual Funds allows you to pledge your Mutual Fund units as collateral against a loan. And by doing this, you can set an overdraft limit in just under three minutes! You can read more on the benefits of the Digital Loan against Mutual Funds here.
Here we tell you all about the criteria and documents required to secure this loan.
Eligibility
There are few eligibility criteria to get a loan against your Mutual Funds.
- Applicant must be a resident Indian
If you are a resident Indian, you are eligible for a loan against any of the securities, provided they are available with the ten Mutual Fund houses under CAMS.
- Select securities open for Hindu Undivided Families (HUFs)
Hindu Undivided Families and NRIs, partnership firms or a private firm can get a loan against select securities.
- Trusts and minors cannot apply
If you are an organizational trust or an individual aged less than 18 years, the facility does not apply to you.
- Range of loan amount
Minimum loan amount for eligibility is Rs.1,00,000 and the maximum is Rs. 20,00,000. Please adjust the quantity of scrips for pledging in case your limit is not in the range.
- You must have a login access to your myCAMS account.
- If you have an online banking account, for example, with the HDFC Bank, then you can simply apply for the LAMF through NetBanking.
Documents Required for Digital Loan against Mutual Funds
For those who have an online banking facility and a Demat account that holds the shares purchased with the bank, the process should not take more than a few minutes. Here’s a quick rundown on how to do that.
- Log in to your NetBanking account by entering in online banking credentials.
- Click on Demat tab
- Click on Request option
- Click on Loans Against Securities
- Pick the shares you would like to pledge as collateral.
For those making physical applications at the bank branch, must have the following documents handy
- Loan Against Mutual Funds application
- Authorized identity proof
- Address proof
- Signature proof
- For private firms and proprietorships,
- IT returns
- Audited Balance Sheet
- Profit and Loss account
Looking to apply for a Digital Loan against Mutual Fund? Click here to get started!
* Terms & conditions apply. Digital Loan against Mutual Funds disbursal at sole discretion of HDFC Bank Ltd.
