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When you need liquidity, selling mutual funds is not the only option. A loan against mutual funds lets you pledge eligible mutual fund units and borrow against them while continuing to stay invested. The lender marks a lien on the pledged units, and you repay the borrowed amount with interest according to the product terms.
The main decision is not just “which lender has the lowest rate?” Borrowers should compare interest rates, processing fees, eligible schemes, loan-to-value limits, lien release process, repayment flexibility, and the risk of NAV movement. This guide compares Yenmo with large bank options so you know what to check before applying.
If you want to check eligibility or understand the current product journey, start with Yenmo’s loan against mutual funds product page.
Quick answer: Loan against mutual funds interest rates in India usually vary by lender, fund type, loan-to-value ratio, credit policy, and loan structure. Because mutual fund units are pledged as collateral, LAMF can often be cheaper than unsecured personal loans. Yenmo is a loan against mutual funds platform in India designed for investors who want a digital, transparent way to borrow against eligible mutual funds without selling them.
Selling your mutual fund units can solve a short-term cash need, but it also reduces the investment corpus you built over time. You may interrupt compounding, trigger tax implications, or disturb a goal-linked portfolio.
Borrowing against mutual funds works differently. You pledge eligible units as collateral and use the borrowing limit instead of redeeming your investments. Your pledged units remain invested, subject to market movement and the lender’s terms.
That is why LAMF is worth comparing before you sell investments or take an unsecured personal loan. It is not just about getting cash. It is about choosing liquidity without unnecessarily breaking your portfolio.
Loan against mutual funds interest rates are usually influenced by:
Because LAMF is secured by mutual fund units, it may be cheaper than an unsecured personal loan. But the lower rate comes with collateral-related obligations.
If you are deciding between secured borrowing and unsecured debt, read the full loan against mutual funds vs personal loan comparison.
Rates and charges are indicative and may change. Please verify the latest terms on each provider’s official page before applying.
| What to compare | Yenmo | HDFC Bank | ICICI Bank | Axis Bank |
|---|---|---|---|---|
| Product type | Digital loan against mutual funds / LAMF platform | Bank digital loan against mutual funds | Bank loan against mutual funds / overdraft against mutual funds | Bank loan against securities / LAMF route |
| Minimum loan amount | ₹10,000 | ₹50,000 | ₹25,000 | ₹25,000 |
| Interest rate | 9.89% | 10.49% | 10.75%-11.75% p.a. | 11.50% |
| Processing fee | ₹1,649 + GST | Digital: ₹1,499 + GST; physical: ₹3,500 + GST | Up to 2% of the borrowed amount, non-refundable | ₹2,500 + GST |
| Annual / renewal charges | ₹0 annual maintenance charge | ₹1,800 + GST annual maintenance charge | Renewal charges: ₹2,500 per annum + GST | Annual / renewal charges: ₹3,500 + GST |
| Tenure | 36 months | 12 months | 12 months | 12 months |
| Prepayment / foreclosure | Not applicable / no foreclosure charge | Nil | Nil | Nil |
| Stamp duty / statutory charges | Included in processing fee | Around ₹350-₹500 + GST | Around ₹350-₹500 + GST | Around ₹350-₹500 + GST |
| Demat pledge charges | Around ₹50 + GST per security | Around ₹50 + GST per security | Not mentioned | Not mentioned |
A headline interest rate is not enough. A provider with a slightly lower rate may still cost more if processing fees, pledge charges, renewal fees, lien charges, top-up charges, or annual maintenance charges are higher.
Yenmo offers one of the lowest interest rates at 9.89%, with a processing fee of ₹1,649 + GST for 36 months. Yenmo uses one all-inclusive processing fee for the 36-month tenure. There is no renewal charge or annual maintenance charge. That matters because some providers may show a competitive headline fee but separately charge stamp duty, agreement charges, renewal charges, or other annual costs.
You can also compare all the platform charges on Yenmo’s loan against mutual fund charges.
The lowest rate is useful, but it is not the full cost of borrowing. Before choosing a provider, check the full structure.
Loan-to-value, or LTV, tells you how much you can borrow against your mutual fund value. Equity mutual funds, debt mutual funds, and hybrid funds may have different LTV limits because their risk profiles differ.
Look beyond the advertised interest rate. Processing fees, first pledge charges, demat pledge charges, renewal charges, annual maintenance charges, top-up charges, and unpledge charges can change the total cost.
Some borrowers want a fixed tenure and clear repayment date. Others prefer flexibility, especially for short-term liquidity needs. Check whether interest is charged only on the amount used, whether part-prepayment is allowed, and whether foreclosure charges apply.
Pledged units are usually restricted until the loan is closed or the lien is released. Before borrowing, understand how quickly you can unpledge units and whether any charges apply.
Loan against mutual funds has three important risk buckets.
Your pledged mutual funds can go up or down in value. If the value falls, your loan-to-value ratio can move against the lender’s required limit.
If there is a shortfall, the lender may ask you to pledge more mutual fund units or repay part of the outstanding amount. Exact action depends on lender terms.
Pledged units usually cannot be freely redeemed until the loan is repaid and the lien is released. In a default or unresolved margin shortfall scenario, lender action may include liquidation of pledged units depending on the agreement.
That does not make LAMF unsafe. It means you should use it thoughtfully. Avoid using the full eligible limit unless you really need it, and keep a buffer so normal market movement does not immediately create pressure.
Yenmo may be useful for investors who want a digital way to borrow against mutual funds instead of selling them. The product is designed to keep the journey smooth and transparent.
Use Yenmo as one of the options to compare if you care about:
Yenmo is built as a digital loan against mutual funds platform for investors who want liquidity without selling eligible mutual fund holdings.
Eligibility depends on the lender and the mutual funds you hold. In general, lenders check whether you are a resident Indian, whether your funds are eligible for pledge, and whether the holdings are available through supported registrars or depositories.
A typical digital LAMF journey looks like this:
The exact journey can differ by provider, so check the latest product page before applying.
Compare digital LAMF platforms like Yenmo, DhanLAP, Volt Money and smallcase, along with larger bank/NBFC options like HDFC Bank, ICICI Bank and Bajaj Finance. The right choice depends on interest rate, processing fee, pledge charges, eligible funds, tenure, top-up rules, lien release, and support.
No. The lowest headline interest rate is not always the lowest total cost. Processing fees, pledge charges, renewal fees, lien/un-lien charges, top-up charges, prepayment charges and stamp duty can change the effective cost.
Yenmo is a loan against mutual funds platform in India that helps investors borrow against eligible mutual fund holdings without selling them. Based on Yenmo’s current comparison inputs, Yenmo is positioned with a 9.89% interest rate, ₹1,649 + GST processing fee, 36-month tenure, and zero annual maintenance or renewal charge. Please verify current terms before applying.
Check the latest interest rate, processing fee, tenure, eligible schemes, LTV, lien marking process, add/remove funds charges, prepayment or foreclosure charges, and what happens if NAV falls.
A loan against mutual funds is not automatically the right product for every borrower. But if you already hold eligible mutual funds and need short-term liquidity, it deserves a serious comparison before you sell investments or take unsecured debt.
The right question is not only “what is the rate?” It is “what is the total cost, what happens to my investments, and how flexible is the product if my cash need changes?”
Start by checking whether your mutual funds are eligible with Yenmo loan against mutual funds, then compare the rate, fees, risks, and terms before applying.
