Emergencies, especially financial urgencies won’t strike before intimating you in advance. You may get stuck in a situation that may demand an urgent flow of money. 

Availing a personal loan may not always be a suitable solution for all. As a result, if you have invested in assets like mutual funds, you can use it for your benefit. You can go ahead and apply for the loan against mutual funds to cover your needs. 

The loan against mutual funds is a unique facility that will help you pledge your assets to a lender and get access to immediate funds. The mutual funds work as security or collateral to let you avail an amount as higher as up to Rs.10 crore. 

Why do you need the loan against mutual funds quickly?

Even though you may have an emergency corpus, there may be situations in life that may force you to avail more money than what you may have an allowance for. 

In such situations, you may either ask your relatives and friends for money or liquidate the investments. 

Nonetheless, if you are aware that the emergency is only for 2-6 months, the liquidating assets such as mutual funds may be a bad idea. It is because after breaking them, you may get some money. 

But you would also need to do away with the ROI that you would have got on the end of the tenor. As a result, it would be smart to apply for a loan against mutual funds, get funds and stay invested in grabbing interest profits later.

How to qualify for the loan against mutual funds facility?

To qualify for the loan against mutual funds, you will need to prove your eligibility and submit some documents to your lender.

Once you do that, you may get instant approvals. Here are some general loan against mutual funds eligibility and documents: 

• The loan against mutual funds applicant should be a citizen of India and not an NRI
• You must have attained the age of 21 years or more 
• You need to have a regular flow of income – you should either be self-employed or a salaried professional 
• It is not available for joint business owners, companies, Hindu Undivided Family (HUF) and other partnerships 
• Each bank and non-banking finance company (NBFC) may limit the minimum and maximum loan amount 
• Some lenders may want the value of your portfolio to be at least Rs.10 lakh to apply for the loan against mutual funds 
• All branches of banks and NBFCs may not be offering the facility. Hence, you should contact them to know about the same 
• ID and address needs to be submitted 
• You also need to furnish Salary Slips and documented copies of the collateral (mutual funds) 
• Recent and coloured passport size photograph  

How to avail the loan against mutual funds?

Different lenders may have multiple methods for letting customers apply for the loan against mutual funds. Here are some standard methods that will help you apply and avail the loan against mutual funds facility: 

1. Go to the ‘loan against mutual funds’ product page of your lender’s website, click on ‘apply now’ button and fill out an online application form 
2. Get a confirmation about the same via SMS and email that will also let you know the application status 
3. Submit the discussed documents to the representative of the lender who will also connect with you to take things forward from here 
4. Once your documents get verified, you will get the desired loan amount into your bank account. Lenders will also provide you with the login details of your online loan account to track its progress from anywhere and 24/7.