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Key Risks to Consider in Loan Against Mutual Funds
Understanding margin and market risks in LAMF.
While Loan Against Mutual Funds provides liquidity benefits, investors must carefully assess associated risks. Market volatility can reduce portfolio value, potentially triggering margin calls or additional collateral requirements.Failure to respond promptly may lead to partial liquidation of pledged units. Borrowers should align loan amounts with repayment capacity and risk tolerance. Understanding interest costs, valuation fluctuations,credit terms is essential before opting for leveraged exposure.Apply Now