The festivities are here and it’s time to pamper yourself and your loved ones with the best of everything. Whether you want to revamp your house/office space, make big-ticket purchases or go on a long vacation – the festive season aka holiday season is the perfect time to do so. And if you are short of funds, HDFC Bank Festive Treats is here for you with one of the easiest funding options – Digital Loan Against Mutual Funds.
A Digital Loan Against Mutual Funds is one of the latest loan offerings for customers who have a Mutual Fund portfolio. These loans are secured against both Equity and Debt Mutual Funds and come with an interest rate ranging between 10-15%. The process of availing a Digital Loan Against Mutual Funds is very convenient as the whole process has become digital.
So why should you opt for this loan option? For one, since more and more individuals’ posess a Mutual Funds investment portfolio. This loan option allows the investor to make additional use of this investment option, apart from earning returns. Moreover, the Digital Loan against Mutual Funds offers a convenient way to raise funds through the form of an overdraft facility. In addition to this, availing this loan is convenient, especially since it is accessible and available on the digital platform. And as part of HDFC Bank Festive Treats, you can get a loan at 9.90% interest rate and at a processing fee of just Rs 750. (T&C apply)
HDFC Bank has tied up with Computer Age Management Services or CAMS which is one of India’s largest share transfer agents. Customers who hold Mutual Funds serviced by CAMS can avail a loan against the Mutual Fund.
Here are three occasions where a Digital Loan against Mutual Fund will assist you:
When you urgently need cash: If you opt for redeeming Mutual Funds, the whole process can take 3 days till the time the funds are credited to your account. If redemption is done on a Thursday or a Friday, the funds get credited to your account the following week. On the other hand, a loan against Mutual Funds is available on the same day. This is particularly helpful in case of medical emergencies and other such times when the funds are needed urgently.
When the market is in a bear phase: One of the reasons to take a digital loan against securities is that it helps in a bear market. When the market is on a downswing, selling funds will lead to capital losses. On the other hand, by availing a Digital Loan against Mutual Funds, the Mutual Fund units can be redeemed when the market is in an upswing.
Trusts and minors cannot apply: The affordability is one of the main reasons to take a Digital Loan against Mutual Funds. In case of short-term fund requirements such as education expenses, especially when the market is on an upswing, availing an overdraft facility can help you retain ownership of your Mutual Funds and still meet your fund requirements. This way, your investment continues to grow while the loan helps to meet your fund requirements.
HDFC Bank offers Digital Loan against Equity Mutual Funds up to 50% of the Mutual Fund value. The loan amount is restricted to Rs. 10 lakhs. In contrast, 80% of the value of a debt Mutual Fund is available as a loan, with the loan amount limit being Rs. 1 crore. This Digital Loan against Mutual Funds can help you raise funds when you urgently need it, at a lesser interest rate.
So, the next time you need funds, don’t hesitate, just click and get a Digital Loan against Mutual Funds.
Read more on the different securities you can take a loan against.
Looking to apply for a Digital Loan against Mutual Fund? Both existing customers and new customers can apply for a DLAMF here.
* Terms & conditions apply. Digital Loan against Mutual Funds disbursal at sole discretion of HDFC Bank Ltd. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from before you take any/refrain from any action.
