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Hidden Costs in Loan Against Mutual Funds You Should Evaluate Carefully
Ideal for short-term financial mismatches without affecting wealth creation goals.
Beyond the advertised interest rate, LAMF carries additional costs that raise the borrowing expense. These include processing fees of up to 1%, state-based stamp duty, RTA charges for pledge creation, and maintenance fees on the approved limit. In 2026, the Effective Annual Cost is usually 1–1.5% higher than the quoted rate. On a ₹5 lakh loan, hidden costs can reach ₹7,500, weighed against tax savings.