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How Loan Against Mutual Funds Works: 5-Step Process
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Understand LAMF in five steps: verify eligibility, choose lender, e-pledge units, get 50–80% LTV, fast disbursal, pay interest monthly while investments keep compounding.
Applying for a Loan Against Mutual Funds is straightforward. First, confirm eligibility—equity, debt, and hybrid units typically qualify. Second, select a bank or NBFC with competitive terms. Third, pledge units electronically via demat/lien marking on the lender portal. Fourth, the lender values NAV and sanctions 50–80% LTV. Fifth, funds are disbursed generally within minutes to 24 hours. You service monthly interest; principal is prepayable anytime. Throughout, units remain invested and continue compounding, subject to scheme performance and lender risk controls.