Loans against shares and mutual funds are the best option to tackle an immediate fund crunch

Please explain the benefits of taking a loan against shares or mutual fund holdings versus taking a personal loan from a bank.

People have always been unclear about what to choose between a loan against shares or MF and personal loans and most of the time they end up taking the latter due to a lack of awareness towards loans against shares and MF. However, as the times are changing, people want quick disbursals and competitive EMIs, and they tend to take up the options where they could meet up with both purposes at the same time. At Abhiloans, people can pay as low as Rs 1330 per month for a disbursal of Rs 1 Lakh.

An instant loan against shares or Mutual Funds is a secured and lucrative offer. They allow you to fetch instantaneous liquidity at low-interest rates and high LTV (Loan to value ratio) of up to 60% for shares and up to 75% for mutual funds which is higher in comparison to personal loans. Also, there is no need for a credit check and this eliminates the doubt of getting the loan application rejected because of the low credit score. The only thing required is the possession of either MF or share to act as collateral. Furthermore, there are no prepayment charges, unlike personal loans where lenders levy a high fee on borrowers who want to close the loan as soon as possible. On the other hand, your investments will remain intact and keep appreciating so that you earn interest and dividends even when you borrow against them.

How can I take a loan against my mutual fund holdings? What are the points that I should be aware of?

AbhiLoans has made the entire process of applying for loans against MF and shares much more simplistic and hassle-free. One can easily apply for loans using our services and the minimal things. The client only requires an Aadhar card, a PAN card, and active mutual funds or shares to lien. Now you just have to do KYC and then start liening your mutual funds to apply for a loan.

How do you plan to serve the customers?

We plan to serve the customers through AMFI distributors, who know when their client is in instant need of funds. We also compensate the distributors who partner with us, those who plan to do so can contact us at partner@knabfinance.com

You are offering loans against mutual funds. For the benefit of retail investors, please describe your offering.

Our offerings of LAS and LAMF aim to cater to the needs of retail investors as these people are more susceptible to confront an immediate financial crunch either for medical emergencies, personal use, or any other important reason, and when they experience such a shortage of funds they tend to go with traditional methods like personal loans which harm them in the long run because of it's high-interest rates and time taking process. Sometimes due to a low credit score, their loan application gets rejected altogether and this is where abhiLoans comes to help them.

Can I pledge any mutual fund that I am currently holding? Do you have some exclusion with regard to asset management companies or types of schemes?

There are plenty of asset management companies operating in the market and we provide loans facility against all mutual funds which are unlocked.

What is the maximum loan amount that I can get on my equity and debt mutual fund holdings? Do you have a minimum loan limit?

Our loan limits start from as low as Rs 15000 and go up to Rs 1,00,00,000. For loans against shares, we offer a loan-to-value ratio beginning from 65% to 50%.In the case of loans against mutual funds, the loan-to-value raises to 65% for all equity MF and 75% for all debt MF which is much higher than any other NBFC offering in the market.

Is your loan against mutual funds facility available to investors who do not have credit scores (credit history)? Is there a minimum credit score below which investors will not be eligible for loans against the mutual fund holdings?

Loans against shares and mutual funds are the best options to tackle an immediate crunch of funds for people who have a low credit score or don't maintain it at all as the credit score will never be taken into account to apply for these loans, hence there is no minimum limit considered. The only thing required is active mutual funds or shares that can be pledged.

For the benefit of retail investors, please explain why taking a loan against mutual funds for short-term needs is more beneficial than redeeming mutual fund units.

Taking a loan against mutual funds rather than redeeming them is lucrative for retail investors in several ways. Starting from the benefit of earning profits and dividends through these securities even after they have been pledged, too, avoiding short and long-term capital gain tax. A loan against mutual fund units will assist you in saving in all these areas too. Furthermore, as we impose no prepayment charges, the customers are free to close the loan even before its complete tenure.