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Loans against mutual funds (LAMF) are gaining popularity in India, but many people are still unsure about how they work. Thanks to misinformation, there are several myths floating around that prevent investors from unlocking the real power of their mutual fund holdings.
Let’s bust the 7 most common myths about loans against mutual funds and reveal why this could be one of the smartest ways to borrow money.
This is one of the most common fears. People think that pledging mutual funds means selling them. That’s not true. Your mutual fund units are only pledged — they remain invested and continue to earn market returns. Once the loan is repaid, the lien is removed and your holdings stay intact.
In reality, loans against mutual funds are secured loans, and are far less risky than personal loans from a lender’s point of view. The investor also benefits because the interest rates are lower and the investment continues to grow. There’s no risk of losing your asset unless you default heavily.
Not with Yenmo. Since the loan is backed by your investments, your credit score doesn’t play a big role. Even if you have a lower score, you can still access funds by pledging your mutual funds. This makes it a great option for those who are new to credit or rebuilding their score.
Think it’s a paperwork nightmare? Think again. At Yenmo, the entire process is digital. You just link your mutual fund account, choose the amount, and get disbursal in a few hours. It’s quicker than most personal loans or credit card approvals.
Another big myth. You don’t need to have ₹10 lakh in mutual funds to be eligible. Yenmo allows loans starting as low as ₹25,000 based on your mutual fund value. Whether you’re an early investor or a seasoned one, it’s accessible to all.
Not at all. Yenmo charges interest-only monthly payments, and you can repay the principal whenever you want. No prepayment penalties, no fixed tenure traps. You stay in control.
On the contrary, loans against mutual funds are one of the most convenient and cost-effective ways to access liquidity. With fast disbursal, low interest rates, and ongoing investment growth, the benefits far outweigh any minor effort involved.
A loan against mutual funds isn’t just a smart borrowing choice — it’s a smarter financial strategy. It lets you maintain your wealth creation journey while handling your short-term needs efficiently. And with Yenmo, the experience is completely digital, affordable, and flexible.
Still have questions? Explore more below or apply now to unlock the potential of your mutual funds.
