Loan Against Mutual Funds

Loan Against Mutual Fund is an overdraft facility which gives you an option to get quick cash rather redeeming your investments. You can avail loan against Mutual Funds by lien marking your mutual funds. These mutual fund will be lien marked to CHOLA until the loan is paid back, however the ownership of these will be with you which means that it continues to give dividends and other benefits to you. This type of loan is available for a short tenure and can be used for different purposes by the borrower except any speculative use or any anti-social use.

Benefits of Loan Against Mutual Funds

  • Loan up to 50% of the value of equity mutual funds and up to 80% against your debt mutual funds
  • Flexible tenure up to 36 months with ZERO pre-closure to individual Borrowers
  • Interest to be paid only on the utilized amount for used period only
  • Loan against Mutual Fund with a minimal turnaround time
  • Standard Documentation - Like KYC and agreement
  • Large list of Approved mutual funds

Features & Benefits

Flexible Tenure Flexible Tenure
Minimal turnaround time Minimal turnaround time
Standard Documentation Standard Documentation

Quick Financial Support

Eligibility and Documentation

  • Age between 18 years to 70 years
  • Non-Resident Indian are not eligible
  • Indian Citizen having a valid Pan card and Aadhaar card
  • Mutual Funds must be as per Chola’s policy

Frequently Asked Questions

  • What is Loan against Mutual Funds (LAMF) and its features?

    Loan against Mutual Fund is a financing facility where you can avail loan by lien marking your Mutual Funds as per Cholamandalam Investment and Finance Company Limited policy.

  • What is purpose of Loan against mutual funds?

    Funds drawn from LAMF can be for personal or business requirement including investments. It is one of the best way to generate liquidity without redeeming your Mutual Fund portfolio. It also saves you from unexpected losses due to market downfall.

  • Whats is the eligibility criteria for applying Loan against mutual funds?

    Indian citizen holding a valid PAN card along with Aadhar Card and between the age of 18-70 years. Non Resident Indians are not eligible.

  • What is the Loan to Value and how it is calculated?

    Loan to value is 50% against CIFCL approved list of Equity Mutual Fund and upto 80% against the Debt Mutual Funds. This is calculated on basis of lower of 30 days or previous day NAV of MFs.

  • How much interest does a customer need to pay?

    Interest is paid on the utilised amount for the number of days the loan has been availed. The due date for the interest would be the first day of every month till end of tenure/closure of loan.

  • If a customer is holding MFs in his company's name. Can he avail loan against them?

    Yes, in case if the investment is in company's name, the loan has to be taken by company.

  • Does Cholamandalam Investment and Finance Company Limited support lending against all Mutual Funds ?

    Yes, Chola supports lending against MFs as per the approved list.

  • Will valuation be as on date of loan application or as on the date of loan disbursement?

    The valuation will be as on date of disbursal as per the valuation method provided by Cholamandalam Investment and Finance Company Limited.

  • On what criteria will the loan be sanctioned to me?

    CIBIL Score and the Value of Mutual Funds pledged (the pledged MFs should be on the CIFCL approved list of MFs). Credit approval is at discretion of Cholamandalam Investment and Finance Company Limited.

  • Can customer release pledged/lien marked Mutual Funds partly?

    Yes, the Customer can release Mutual Fund only if the pledged value is more than required collateral value and can also opt for a higher limit by contacting Chola.

  • Will any prepayment charges be applied in case of prepayment due to the reason of margin shortfalls?

    There are no prepayment charges in case of early repayment.

  • Can I pre-close my loan by making part payments and without any pre-closure charges?

    Pre closure of loan is allowed by making part payments and without pre-closure charges for Individuals.

  • Should the Margins be maintained every single day? What does the Borrower do in case of margin shortfall?

    The margins will be checked on a daily basis and alert message will be sent to the registered mobile numbers /email id during the shortfall.In case of shortfall, the borrower can bring in additional securities to overcome shortfall or make a repayment to extent of shortfall .Customer is always expected to maintain a 50% LTV till the loan maturity and at any point of time.