Question 1

What is a loan against mutual funds?

Accepted Answer

A loan against mutual funds is a secured loan where you pledge your mutual fund investments as collateral and get access to funds without selling your units. With Yenmo, your investments are fetched digitally and eligible mutual fund units are held as collateral, helping you unlock liquidity or cash while continuing to stay invested.

Question 2

Can I get a loan against my mutual funds in India?

Accepted Answer

Yes. If you hold mutual fund investments in India, you can apply for a loan against mutual funds with Yenmo. The process is designed to be digital, simple, and fast, so you can check your eligibility and use your existing portfolio to access funds without redeeming your investments.

Question 3

How much loan can I get against mutual funds?

Accepted Answer

Yenmo offers loan amounts from ₹25,000 up to ₹5 crore, depending on the value and type of mutual funds in your portfolio. We can also offer you a loan higher than 5 crore, however it'll be best to contact Yenmo's support team in such cases.

Question 4

What is the loan-to-value ratio for mutual fund loans?

Accepted Answer

The loan amount depends on the mutual fund category and the value of the units pledged. For equity mutual funds, Yenmo typically offers up to 50% of the fund value. For debt or liquid funds, the loan amount can go up to 90% of the fund value, subject to eligibility and lender policies.

Question 5

What is the interest rate on Yenmo's loan against mutual funds?

Accepted Answer

Yenmo offers competitive interest rates for loans against mutual funds, starting from as low as 9.89% as well. There are no part-payment or foreclosure charges as well, making it a flexible option for short-term and long term liquidity needs.

Question 6

Who is eligible for a loan against mutual funds?

Accepted Answer

Individuals holding mutual fund units in their own name, either as single or joint holders, may be eligible for a completely online loan against mutual funds process. For HUFs, private limited companies, or other non-individual entities, the process may require offline assistance from Yenmo's team.

There are age criteria that vary by lender: for Bajaj Finance Ltd, the applicant age must be between 21 to 70 years, and for DSP Finance, it is 18 to 70 years.

Question 7

Do I need to sell my mutual funds to get a loan?

Accepted Answer

No. You do not need to sell or redeem your mutual funds. Instead, eligible units are pledged as collateral. This allows you to access funds while your investments remain intact.

Question 8

Which mutual funds are eligible for a loan?

Accepted Answer

Eligibility depends on the fund type, lock-in status, and lender criteria. Some funds, such as ELSS funds under lock-in or funds with specific restrictions, may not be eligible for pledging if they are within the lock-in period. Yenmo checks your portfolio and helps identify which investments are eligible for a loan against mutual funds and lets you know all the details clearly.

Question 9

Can I pledge mutual funds held in Zerodha or demat form?

Accepted Answer

Yes. Yenmo can assist you with pledging mutual funds held through Zerodha, Groww, Upstox or other brokers, including mutual funds held in demat form. For such cases, you can reach out to support@yenmo.in for assistance.

Question 10

What documents are required for a loan against mutual funds?

Accepted Answer

The process is completely digital. You will need your PAN number, mobile number linked to your investments, Aadhaar number for KYC and bank account details. You can enter these details within Yenmo and complete your process digitally.

For cases where the mutual funds are held in the name of a non-individual client such as a Pvt Limited company, HUF, LLP etc, we may need some more documents to complete the process. You can get in touch with the Yenmo support team to guide you in such cases.

Question 11

What is pledging or lien marking of mutual funds?

Accepted Answer

Pledging, also called lien marking, means your mutual fund units are marked as collateral in favour of the lender. You continue to own the units, but they cannot be redeemed until the lien is removed or the loan obligation is cleared.

Question 12

Do I pay interest on the full approved loan amount?

Accepted Answer

No, interest is only charged on the amount you use, not simply on the total approved limit. For example if you are approved for a loan of 5 lakh but you withdraw only Rs.1 lakh, you will not be charged interest on the entire approved amount of Rs. 5 lakh but instead only on the amount you have withdrawn of Rs. 1lakh.

Question 13

Can I repay my loan early?

Accepted Answer

Yes, you can repay your loan at any time without having to pay any pre-payment of foreclosure charges. You can in fact even pay the loan the very next day!

Question 14

What happens if the value of my mutual funds falls?

Accepted Answer

Since your loan eligibility depends on your portfolio value, market fluctuations can affect your eligible loan amount. A steep fall in portfolio value may reduce your eligibility or require you to manage the pledged amount as per lender requirements.

Question 15

Is taking a loan against mutual funds a good idea?

Accepted Answer

A loan against mutual funds can be a smart option for short-term financial needs because it helps you access money without liquidating your investments. It may also be more cost-effective than unsecured personal loans or credit card borrowing, depending on your profile and loan terms.

Question 16

What are the disadvantages of a mutual fund loan?

Accepted Answer

While loans against mutual funds are flexible and cost-effective, there are some disadvantages to it:

1. Not all mutual funds would be eligible to be pledged. For example - an ELSS fund, or a fund that has a lock in period might not be eligible for being pledged

2. Fluctuations in the portfolio would lead to change in eligibility. As your portfolio value changes, so will your eligibility. A steep drop in your portfolio value would decrease your eligibility

Loan Against Mutual Funds

Key Benefits of Yenmo's Loan Against Mutual Funds

Interest rate starting from 9.89%

No foreclosure & prepayment charges

No need to pay EMI! Pay only interest

Secure fast digital process

Save on taxes

No Minimum credit score

How it works

Apply for Loan against Mutual Funds in just 5 minutes

Interested in collaborating
with Us?

Interested in collaborating
with Us?

Loan Against Mutual Funds

Key Benefits of Yenmo's Loan Against Mutual Funds

Interest rate starting from 9.89%

No foreclosure & prepayment charges

No need to pay EMI! Pay only interest

Secure fast digital process

Save on taxes

No Minimum credit score

How it works

Apply for Loan against Mutual Funds in just 5 minutes

Interested in collaboratingwith Us?

Interested in collaboratingwith Us?

Interested in collaborating
with Us?

Interested in collaborating
with Us?