LAMF Loan Interest Rates

After my last post on CRED I was digging deeper to understand the Loan Against Mutual Funds (LAMF) landscape, I wish I knew this earlier 🥹 A few years ago, I took a personal loan at 18% interest—only to realize later that I could have borrowed against my mutual funds for less than 10%. Instead of paying high EMIs, I could’ve kept my investments growing while accessing liquidity. That’s exactly what Loan Against Mutual Funds (LAMF) offers—a cheaper, smarter way to borrow without selling your investments. With fintechs like CRED, Bajaj Finance, and major banks making this process digital, secured lending is now more accessible than ever. 💡 How Does It Work? 1️⃣ Loan Limit Calculation • You pledge your mutual funds as collateral, and the lender offers a credit line up to 50-70% of the fund’s value. • Example: If your mutual fund portfolio is worth ₹10 lakh, you can get a loan of ₹5-7 lakh, depending on the fund type. 2️⃣ Interest Rates & Costs • Interest rates range from 8-10% per annum, far lower than unsecured personal loans (16-24%). • Some lenders charge a processing fee (0.25-1%) and a renewal fee (if applicable). 3️⃣ Collateral Rules • Debt mutual funds allow a higher loan limit (up to 80%), as they are less volatile. • Equity mutual funds usually have a lower loan-to-value (LTV) ratio (50-60%), as stock prices fluctuate more. 4️⃣ Repayment & Usage • Borrowers can withdraw money as needed, just like a credit line. • Interest is charged only on the amount utilized, making it cost-effective. • Unlike selling mutual funds, investments continue to grow, ensuring wealth creation. 🔥 Why This is a Game-Changer? ✅ Lower Interest vs. Personal Loans – Borrowing at 8-10% instead of 16-24% saves big on interest. ✅ No Need to Sell Investments – Your mutual funds continue compounding while you borrow. ✅ Flexible Repayment – Pay interest only on the amount used, with no fixed EMIs. 📈 Who’s Leading This Space? • CRED Cash+: Instant loans against mutual funds with a 90-second approval process. • Bajaj Finance & HDFC Bank: Traditional players with structured LAMF options. • Kuvera, Groww & Zerodha: Exploring fintech-led LAMF integrations. With only 1.5% of India’s ₹33 lakh crore mutual fund AUM being leveraged for secured loans, this space is set for explosive growth. Wish I had known this earlier—but now you do! 🚀 Photo- Inc42 Media plus #startups #india

Selling your mutual funds in a hurry could cost you more than you think. There’s a smarter way to get liquidity without disturbing your long-term investments. Here’s what you should know: 1) Selling Mutual funds hurts your goals - You break compounding, the most powerful wealth-building tool. - You trigger unnecessary capital gains tax. - You miss out on market recovery and future growth. 2) Instead, Take a Loan Against Mutual Funds (LAMF). By doing this - You get immediate liquidity, up to 70–80% of your fund value. - Interest rates are much lower (starting from 8–10%) compared to personal loans (12–18%). - No need to sell your investments. They continue to grow while you solve your cash needs. 3) How it works - Mutual fund units are pledged as collateral. - You get an overdraft limit or a lump sum in your account. - Pay interest only on the amount you use. 4) The data you should know - According to AMFI, the mutual fund industry AUM has crossed ₹55 lakh cr. - However, less than 2% of investors know about LAMF as an option. - You can use the money for your personal life needs, such as Emergency medical needs, Business expansion, Home renovations, or Wedding expenses. Quick, seamless, and smart. No distress selling. No lost opportunities. If you are looking to unlock liquidity without killing your compounding journey. At AND Fintech, we help you access loans against mutual funds efficiently, securely, and with the best terms. Send a Hi on WhatsApp +91 7700935025 or Email at Info@andfintech.in Visit our website: https://andfintech.in/ Follow DWIPA SHAH for more insights on Investing #SmartMoneyMoves #MutualFundsIndia #FinancialPlanning #LiquiditySolutions #NRIInvesting

➡ Should you consider taking loan against mutual funds? Instead of breaking your fixed deposits or taking out high-interest personal loans, did you know you can borrow against your mutual fund units? It’s an option that not many investors are aware of, but it can be a smart way to navigate financial difficulties without disrupting your long-term investments. 🎈 The numbers speak: According to AMFI data, in 2020, only 54% of retail investors remained invested in equity funds for over 2 years. Most banks and NBFCs offer loans against mutual funds at interest rates ranging from 8% to 16% per annum. Loan amounts can vary from a minimum of ₹25,000 to a maximum of ₹5 crores, depending on the lender and the type of mutual fund (equity, debt, or hybrid). ➡ Why consider this option? Interest rate advantage: With secured loans against mutual funds, you could get an interest rate as low as 9% to 11% per annum, which is often lower than personal loans or credit card interest. Avoid short-term capital gains tax: By borrowing instead of redeeming your units, you avoid the 20% short-term capital gains tax applicable if you sell equity funds within a year. Keep earning returns: Your mutual fund investments continue to generate returns as they remain invested in the market. 🎈 Considerations: During a market downturn, the value of your pledged units might drop, leading to a lower loan amount or a request from the lender to pledge additional units. Historical data shows that Nifty 50 has only generated returns exceeding 10% in about 54% of rolling one-year periods over the last 15 years. This means your investment returns may not always surpass the cost of the loan. 🎈 Your turn: Have you ever considered borrowing against your mutual funds? What’s your take on using this strategy during financial emergencies? Share your thoughts in the comments! Follow Chakravarthy V for more insightful posts on #personalfinance, #wealthmanagement and investing. #MutualFunds #Investing #FinancialPlanning #PersonalFinance #Loans #InvestmentStrategy