Loan Against mutual funds FAQs | Fundpeloan

Frequently Asked Questions

What is Loan Against Securities (LAS)?

A Loan Against Securities (LAS) is essentially a "credit line" offered by FundPeLoan that lets you borrow money using your investments—like shares or mutual funds—as a guarantee.

Instead of selling your assets to get cash (which might trigger taxes or stop your future gains), you "pledge" them to a lender. You keep full ownership, earning all dividends and market growth. You only pay interest on the money you actually use, and once you pay it back, the "lock" on your investments is removed. It’s a smart way to get quick cash while keeping your long-term wealth intact through fundpeloan.

What is a Loan Against Mutual Funds (LAMF)?

A Loan Against Mutual Funds (LAMF) allows you to borrow money by pledging your mutual fund units as collateral. The units remain invested but are marked under lien and cannot be redeemed until repayment. FundPeLoan facilitates LAMF digitally through its lending partner.

Which all securities are eligible for Loan Against Securities (LAS) at FundPeLoan?

Existing

Mutual Fund
Shares

FundPeLoan facilitates loans against mutual fund schemes (up to 80%) and regulator-approved listed shares (up to 50%). The eligible amount depends on applicable Loan-to-Value (LTV) limits and the approved securities list.

Upcoming

Fixed Deposit
Insurance
Bonds
Debentures

Who is eligible for Loan Against Securities at fundpeloan?

You should be between 18 and 70 years of age.
You should be an Indian resident.
Minimum credit score and income proofs are not required.

How does a Loan Against Securities work?

A Loan Against Securities works as a credit line. You check your eligible limit, pledge selected securities, receive a sanctioned credit line, and withdraw funds as needed while paying interest only on the utilized amount. The pledge is released once repayment is complete.

How much loan can I borrow or get against my mutual funds or shares?

You can avail a credit line starting from ₹25,000 up to ₹5 crore, depending on the market value of pledged securities and the applicable LTV ratio facilitated through FundPeLoan.

What is the credit limit and how is it calculated?

The credit limit is calculated as a percentage of the current market value of pledged securities. This percentage, known as the Loan-to-Value (LTV) ratio, varies based on the type of security and applicable policies.

Why Loan Against Securities (Loan Against Mutual Fund or Shares etc) is better than Personal Loan?

Since it is secured by investments, LAS offers lower interest rates compared to unsecured personal loans. Loan limits depend on market value and applicable LTV ratios.

What are the documents required to get a Loan against Mutual funds?

The process is 100% digital, hence you don't need to have any document in physical form. For quick processing, please keep below mentioned details handy:

Aadhar and PAN number
Mobile number linked with your Investments / Securities.
Bank account details for account verification and receiving the loan amount
Debit card or net banking details for setting up the mandate.

Which mutual funds or shares are eligible for a loan?

For Mutual Fund as security

Fundpeloan's loan against mutual funds is available for more than 8000 mutual funds offered by various asset management companies (AMCs) in India. However, please note that ELSS tax saving funds with a date of purchase of less than 3 years (not matured) are not eligible for the loan.

What is lien marking of Securities?

For Mutual Fund: When you take a loan against your mutual fund units, we pledge your mutual fund units, so that it cannot be redeemed until you pay back the loan. The lien marking is done 100% digitally and in real-time.

For Shares: When you take a loan against your shares, we pledge your shares, so that it cannot be sold until you pay back the loan. The lien marking is done digitally or physically depending on the registry your shares are registered with.

Can I choose my mutual fund units or shares for lien marking?

Yes, you can lien mark any mutual fund units or shares of your choice from your portfolio. We will show you an optimal allocation for lien marking depending on your portfolio and loan amount that you had asked for. You can change the schemes and units and have your own allocation for lien marking. We are completely flexible with it.

What will my monthly payments look like?

On a monthly basis, you pay an interest on the outstanding loan amount. Additionally, you can choose to repay the principal at any time during the loan tenure. Example, if you have an outstanding loan of ₹1,00,000 with interest rate of 10.5%, your monthly payment would be (₹1,00,000 x (10.50/12)/100) = ₹875

What is the interest rate on a Loan Against Securities?

Interest rate starts from 10.25% per annum with applicable criteria and are charged only on the utilized loan amount, not on the total sanctioned limit. All applicable charges are disclosed before acceptance

How long does it take for funds to be credited?

Once approved and securities are pledged, funds are typically credited within a few working hours.

How are my securities impacted after taking the loan?

Pledged securities remain in your name and continue to participate in market movements. However, they cannot be redeemed or sold until repayment.

What happens if the value of pledged securities falls?

If the market value declines, additional securities may need to be pledged or partial repayment may be required. Failure to act may lead to liquidation of pledged securities.

What are the charges associated?

Processing fees, pledge charges, applicable stamp duty, etc. are being covered under processing fees. Interest is charged separately as per the usage and applicable interest rate.

Are there prepayment or foreclosure charges?

FundPeLoan does not charge prepayment or foreclosure fees on Loan Against Securities and Mutual Funds.

Why choose LAS instead of redeeming investments?

Loan Against Securities provides liquidity without selling investments, allowing you to remain invested while meeting funding needs.

Is my CIBIL score checked?

The lending partner may conduct a credit assessment, including checking your CIBIL score. Eligibility is primarily based on pledged securities’ value.

Can I partially release pledged securities?

Partial release may be allowed if the outstanding loan remains within permitted LTV limits, subject to valuation at the time of request.

What happens if I miss a repayment?

Missed payments may lead to penalties, margin calls, or liquidation of pledged securities to recover dues.

Is Loan Against Mutual Fund and Shares safe?

Loan Against Mutual Fund and Shares is a secured lending facility offered through approved lending partners. Investments remain in your name but are pledged as collateral. Borrow responsibly considering market and repayment risks.

Can I withdraw funds multiple times?

Yes, Loan Against Securities (Mutual Fund and Shares) works as a credit line allowing multiple withdrawals within the sanctioned limit while paying interest only on utilized amounts.

I have mutual funds but Fundpeloan is not able to fetch.

Fundpeloan can seamlessly fetch and process mutual fund portfolios held in folio format. If your mutual funds are held in Demat form, please get in touch with us—these cases are handled offline and our team will assist you through the process.