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Risks Involved in Loan Against Mutual Funds
LAMF carries market risk, including NAV drops and potential margin calls.
Loan Against Mutual Funds involves market linked risks because the value of pledged units can fluctuate. A sharp fall in NAV may lead to margin calls, requiring additional collateral or partial repayment. Failure to respond can result in fund liquidation by the lender. Borrowing conservatively and monitoring portfolio movements helps manage these risks, especially during volatile market conditions or prolonged downturns. Apply Now