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14h agoWhat Is a Margin Call in LAMF? How to Handle It
A margin call in a Loan Against Mutual Funds (LAMF) arises when the NAV of pledged units falls, pushing the loan-to-value (LTV) ratio above the lender’s permitted limit. For example, borrowing ₹5 lakh against ₹10 lakh NAV (50% LTV) becomes risky if NAV drops to ₹8 lakh, raising LTV to 62.5%. The lender then demands corrective action—either pledging more units, repaying part of the loan, or adding cash collateral. Failure to respond can result in forced unit liquidation at market value.
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14h agoWhat Is a Margin Call in LAMF? How to Handle It
A margin call in a Loan Against Mutual Funds (LAMF) arises when the NAV of pledged units falls, pushing the loan-to-value (LTV) ratio above the lender’s permitted limit. For example, borrowing ₹5 lakh against ₹10 lakh NAV (50% LTV) becomes risky if NAV drops to ₹8 lakh, raising LTV to 62.5%. The lender then demands corrective action—either pledging more units, repaying part of the loan, or adding cash collateral. Failure to respond can result in forced unit liquidation at market value.
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What Is a Margin Call in LAMF? How to Handle It
about 15 hours ago
1 min read
81 words
A margin call happens when NAV declines push LTV beyond limits; respond quickly by adding collateral, repaying partially, or risk forced liquidation.
A margin call in a Loan Against Mutual Funds (LAMF) arises when the NAV of pledged units falls, pushing the loan-to-value (LTV) ratio above the lender’s permitted limit. For example, borrowing ₹5 lakh against ₹10 lakh NAV (50% LTV) becomes risky if NAV drops to ₹8 lakh, raising LTV to 62.5%. The lender then demands corrective action—either pledging more units, repaying part of the loan, or adding cash collateral. Failure to respond can result in forced unit liquidation at market value.
A margin call in a Loan Against Mutual Funds (LAMF) arises when the NAV of pledged units falls, pushing the loan-to-value (LTV) ratio above the lender’s permitted limit. For example, borrowing ₹5 lakh against ₹10 lakh NAV (50% LTV) becomes risky if NAV drops to ₹8 lakh, raising LTV to 62.5%. The lender then demands corrective action—either pledging more units, repaying part of the loan, or adding cash collateral. Failure to respond can result in forced unit liquidation at market value.
Tags:
mutual_funds
LAMF
mutual_funds
LAMF
margin call
risk management
collateral
Source:
Oct 23, 2025 • 13:59 IST