Loan Against Mutual Funds With No Annual Fee or Foreclosure
Loan Against Mutual Funds With No Annual Fee and No Foreclosure Charges: The True Cost Over 3 Years
By Ashutosh Purohit
You want a loan against your mutual funds, and you want to know the full cost. Many of these loans charge a fee every year, and some charge you for closing early. Yenmo's loan against mutual funds has no annual fee and no foreclosure charge, which is a fee for closing the loan early.
The loan is a credit line, so you withdraw money from it when you need it. It runs for 3 years, or 36 months, so you don't pay a yearly renewal fee in that time. You pay one processing fee, from ₹1,649 + GST, only once. Bajaj Finance Ltd sanctions the loans.
Interest is 9.89% to 10.49% a year. The rate depends on your sanctioned amount, which is the total credit the lender approves for you. You pay interest only on the money you withdraw. No loan at Yenmo is priced over 10.49% a year.
The short version
- Yenmo charges ₹0 annual maintenance, ₹0 renewal and ₹0 foreclosure.
- The only upfront fee is the processing fee, from ₹1,649 + GST, paid once.
- You pay interest only on what you withdraw. If you withdraw nothing, you pay nothing extra.
- A yearly fee on a 12-month loan is charged again every year, so it adds up.
What are the charges on a Yenmo loan against mutual funds?
Yenmo charges no annual fee, no renewal fee and no foreclosure charge. Here is every charge in one place.
| Charge | Yenmo loan against mutual funds (lender: Bajaj Finance Ltd) |
|---|---|
| Annual maintenance charge (AMC) | Nil (₹0) |
| Renewal fee | Nil (₹0). No renewal within the 3-year tenure |
| Foreclosure charge | Nil (₹0) |
| Prepayment and part-payment charges | Nil (₹0) |
| Processing fee | From ₹1,649 + GST, charged once. Covers stamp duty and the first pledge and unpledge |
| Interest rate | 9.89% to 10.49% p.a., set by your sanctioned amount, charged only on the amount you withdraw. No loan at Yenmo is priced over 10.49% a year |
| Tenure | 3 years (36 months) |
| EMI | None. You pay interest only, and repay the principal whenever you like within the tenure |
| Other lender charges (pledge, unpledge, demat, invocation, penal, bounce) | Listed in full on the Yenmo charges page |
Yenmo guarantees no annual or renewal fee on any Bajaj Finance loan processed through Yenmo. You can repay part or all of what you owe at any time, for ₹0.
Why is there no annual fee?
There is no annual fee because the credit line runs for 3 years from the start.
Many loans against mutual funds run for 12 months. At the end of each year, the lender has to renew the loan. Lenders that work this way often charge a renewal fee or an annual maintenance charge each time.
Yenmo's credit line does not need renewal in year 2 or year 3. So there is no renewal fee to pay. That is why Yenmo can charge ₹0 annual maintenance and ₹0 renewal.
What interest rate will you pay?
Your rate depends on your sanctioned amount. This is the total credit the lender approves for you. The rates run from 9.89% to 10.49% a year. No loan at Yenmo is priced over 10.49% a year.
| Sanctioned amount | Interest rate (p.a.) |
|---|---|
| ₹2 crore and above | 9.89% |
| ₹1 crore – ₹2 crore | 9.99% |
| ₹50 lakh – ₹1 crore | 10.09% |
| ₹25 lakh – ₹50 lakh | 10.19% |
| ₹10 lakh – ₹25 lakh | 10.29% |
| ₹2 lakh – ₹10 lakh | 10.39% |
| ₹25,000 – ₹2 lakh | 10.49% |
How much does ₹2 lakh cost over 3 years on Yenmo?
Say your mutual funds give you a sanctioned limit of ₹3 lakh. You withdraw ₹2 lakh. A ₹3 lakh sanction is in the ₹2 lakh to ₹10 lakh slab. So your rate is 10.39% a year, from Bajaj Finance Ltd. If your limit is ₹3 lakh and you withdraw ₹2 lakh, you pay interest on ₹2 lakh only.
If you keep the full ₹2 lakh for all 3 years, this is your cost:
- Interest each year: ₹2,00,000 × 10.39% = ₹20,780. That is about ₹1,732 a month.
- Interest over 3 years: ₹20,780 × 3 = ₹62,340.
- Processing fee, paid once: ₹1,649 + GST.
- Annual or renewal fee for years 1 to 3: ₹0.
- Foreclosure charge when you close: ₹0.
- Total cost over 3 years: ₹63,989 + GST on the processing fee.
The processing fee is about 0.82% of the ₹2 lakh you withdrew. Spread over 3 years, that is about 0.27% a year.
If you repay the ₹2 lakh after 6 months, this is your cost:
- Interest for 6 months: ₹20,780 ÷ 2 = ₹10,390.
- Processing fee, paid once: ₹1,649 + GST.
- Foreclosure or prepayment charge: ₹0.
- Total cost: ₹12,039 + GST on the processing fee.
Repaying early cuts your interest and costs nothing extra. Your credit line also stays open for the rest of the 3 years. You pay no annual fee to keep it, in case you need it again.
These figures assume you pay interest every month and the rate stays at 10.39% p.a. Your lender calculates the exact interest. Your Key Fact Statement shows the final charges. Try your own numbers on the loan against mutual funds calculator.
Why does a yearly renewal fee cost more than it looks?
A renewal fee looks small next to the interest rate. People often miss it because you don't pay it on day one.
The fee repeats. The lender charges it every time it renews the loan. If you keep the loan for 3 years, you pay it again and again.
You pay it even if you borrow nothing. The fee keeps the line open. The lender charges it whether you withdrew ₹2 lakh that year or nothing at all.
Some lenders set the fee as a percentage of the sanctioned limit. Then you pay it on the full limit, including the part you never withdrew.
GST is added on top. So the amount you pay is higher than the listed fee.
Each renewal is also a fresh review. The lender looks at your loan again before it renews it. Read the renewal terms in your loan agreement.
How does a yearly fee add up over 3 years?
Take a loan with a 12-month tenure that charges a renewal fee of ₹X each year. Over 3 years, you renew it twice, at the start of year 2 and year 3. So you pay 2 × ₹X, plus GST.
Some lenders call it an annual maintenance charge and bill it every year. Then you pay 3 × ₹X, plus GST. This fee may be charged on the full sanctioned limit, whether you use it or not. You also pay that lender's own processing fee.
On Yenmo, the yearly fee is ₹0 for all 3 years. You pay the processing fee once, from ₹1,649 + GST.
There is no fresh review each year within the 3-year tenure. Foreclosure is ₹0. For other lenders, check their schedule of charges.
To find your total yearly fees, multiply the yearly fee by the number of years you keep the loan. Then add GST.
A low rate with a yearly fee can cost more than a slightly higher rate with no yearly fee. This happens more often if you keep the line open for several years. It also happens more often if you don't use all of your limit.
What fees should you watch for in a loan against mutual funds, and how do they add up?
Every loan against mutual funds has the same kinds of costs. They fall into four groups.
- Interest. This is the biggest cost. Check if it is charged on the amount you withdraw or on the full limit. On Yenmo, you pay it only on the amount you withdraw. The rate is 9.89% to 10.49% p.a. by sanctioned amount. No loan at Yenmo is priced over 10.49% a year.
- One-time fees. These are the processing fee, stamp duty and pledge creation. On Yenmo, the processing fee starts at ₹1,649 + GST. It already covers stamp duty and the first pledge and unpledge with Bajaj Finance.
- Yearly fees. These are renewal fees and annual maintenance charges. On Yenmo, they are ₹0 within the 3-year tenure.
- Event fees. You pay these only if something happens. Penal charges apply if you pay late. Bounce charges apply if a payment fails. Invocation charges apply if your pledged units have to be sold to recover dues. Extra pledges or unpledges also have charges. Foreclosure and part-payment charges belong in this group too. On Yenmo, foreclosure and part-payment are ₹0. The rest are on the charges page.
To get your total cost, add up these items:
- interest on what you withdraw, for as long as you keep it
- one-time fees
- yearly fees × the number of years
- any event fees you trigger
- GST on the fees
On Yenmo, say you pay interest on time and repay within the tenure. Then your cost is only the interest and the one-time processing fee. Your yearly fees are ₹0.
Can you get a loan against mutual funds without a processing fee?
Yenmo does charge a processing fee. It starts at ₹1,649 + GST, and you pay it once for the full 3-year tenure. It includes stamp duty and the first pledge and unpledge.
If an offer has no processing fee, check what else it charges. It may have a yearly renewal fee, an annual maintenance charge or a higher interest rate. Add up all four groups of fees for the time you plan to borrow. Then compare the totals.
What should you ask before you pledge?
When you pledge your funds, the lender puts a hold on them. Your funds stay in your name, but you can't sell them until you repay. Ask these questions first:
- Is interest charged on the amount I withdraw, or on the full limit?
- What is the tenure? Do I have to renew every year, and what does renewal cost?
- Is there an annual maintenance charge? Is it a flat fee or a percentage of my limit?
- What does the processing fee include? Does it cover stamp duty and the first pledge and unpledge?
- Is there any charge to repay early, in part or in full?
- What are the penal, bounce and invocation charges?
- Does the Key Fact Statement show all of these before I sign?
For a longer checklist, read our guide to hidden charges in a loan against mutual funds. For rates across the market, see our loan against mutual funds interest rate comparison.
How do you check your limit on Yenmo?
You can check your limit online in a few steps.
- Enter the mobile number linked to your investments at lamf.yenmo.in.
- See your eligible funds. Mutual funds held with CAMS or KFintech, mutual funds in demat and stocks can all count. ELSS units still in lock-in don't count.
- Complete KYC with your PAN, Aadhaar and bank account.
- Pledge the funds you choose. They stay invested in your name. Nothing is sold.
- Withdraw what you need, up to your limit. Each withdrawal can be as small as ₹500. You pay interest only on what you withdraw, with no annual fee and no foreclosure charge.
Loans start at ₹25,000. To reach that, you need about ₹50,000 of equity funds, or less in debt funds. You can borrow up to ₹5 crore online. There is no minimum credit score.
Under RBI's NBFC Credit Facilities Directions, 2025, NBFCs can lend up to 50% of the value of equity mutual funds.
If you want to keep your funds invested and still get cash, you can check your limit in a few minutes.
Check your eligibility · See all charges · Loan against mutual funds · Loan calculator
Frequently asked questions
Which loan against mutual funds has no foreclosure charges and no annual fee?
Yenmo's loan against mutual funds has ₹0 foreclosure charges and ₹0 annual fee, because the credit line runs for 3 years. You pay a one-time processing fee from ₹1,649 + GST. Interest is 9.89% to 10.49% p.a. by sanctioned amount, charged only on what you withdraw. No loan at Yenmo is priced over 10.49% a year.
What are the charges for a loan against mutual funds on Yenmo?
On Yenmo, the annual maintenance charge, renewal fee and foreclosure, prepayment and part-payment charges are all ₹0. The processing fee is from ₹1,649 + GST, paid once, and covers stamp duty and the first pledge and unpledge. Interest is 9.89% to 10.49% p.a. by sanctioned amount, on the amount you withdraw. No loan at Yenmo is priced over 10.49% a year. Other lender charges, such as penal and bounce charges, are listed on yenmo.in/charges.
What is the processing fee for a loan against mutual funds?
It depends on the lender. On Yenmo, the processing fee starts at ₹1,649 + GST, and you pay it once for the 3-year credit line. For loans from Bajaj Finance Ltd, it covers stamp duty and the first pledge and unpledge.
Can I get a loan against mutual funds without a processing fee?
Yenmo charges a one-time processing fee from ₹1,649 + GST, and no annual fee after that. If an offer has no processing fee, check if it has a yearly renewal fee, an annual maintenance charge or a higher rate. Add up every fee for the time you plan to borrow, then decide.
Is there any yearly charge on a loan against mutual funds?
Some lenders run 12-month loans and charge a renewal fee or annual maintenance charge every year. Yenmo does not. Its credit line runs for 3 years, and the annual maintenance and renewal charges are ₹0 in that time.
Can I close a loan against mutual funds early without a penalty?
On Yenmo, yes. Foreclosure, prepayment and part-payment charges are ₹0. You can repay part or all of what you owe at any time within the 3-year tenure. You pay interest only for the days you used the money.
Yenmo Technologies Pvt Ltd is a loan service provider. Loans are sanctioned and disbursed by RBI-regulated lending partners. Yenmo is also an AMFI-registered mutual fund distributor (ARN 361524).
