Applying for a loan has been one of the most challenging banking procedures in India for quite a while now. But with the advent online banking, and digitisation of most banking procedures, applying for a loan has become more convenient for customers. You can read more about applying for a Digital Loan against Mutual Funds here.
In fact, one of India’s biggest private banks, HDFC Bank, has just unveiled a facility which takes the process a few steps further. In association with CAMS, the bank now provides customers with the facility to obtain Loans against Mutual Funds. And this service can be availed through the digital platform, reducing a procedure that usually takes five to six working days, down to a mere few minutes.
What is a Loan against Mutual Funds?
Sometimes, you might require funds on an urgent basis for a short duration. Often, investors consider liquidating their Mutual Fund investments to raise the required funds. But you do not need to do that as you can borrow money against your Mutual Fund units. This is called Loan against Mutual Funds or LAMF.
This process can be done physically, or digitally.
Who can get LAMF?
So, the question on everybody’s mind right now is, ‘Can I get Loan on Mutual Funds?’. HDFC Bank has laid down certain factors that determine who can apply for Loan Against Mutual Funds (LAMF):
- Applicant must be a citizen of India
If you are applying for LAMF, then the first and foremost criteria you need to fulfil is that you be a citizen of India. - Applicant must be a customer of the bank
If you are applying for Digital LAMF, then you need to be a customer of the bank. This way, you can log in to your account with your information and cut down on a lot of the verification formalities that are required. This also determines your relationship with the bank and influences the interest rates. - Limits on the loan
The minimum loan amount you can get against mutual funds is INR 1 lakh, while the maximum is INR 10 lakhs against equity funds and INR 1 crore against debt funds. So, you can apply for the LAMF if you seek funds within that range. Within this range, you borrow up to half the value of your Mutual Funds portfolio. - CAMS Fund Houses
HDFC Bank Digital LAMF facility is open to all customers with assets in any of the ten fund houses that are currently registered with CAMS. It must be noted that these ten fund houses combined constitute at more than 60% of the total assets under management of the industry.
Looking to apply for a Digital Loan against Mutual Fund? Click here to get started!
* Terms & conditions apply. Loan 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.
