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Managing Margin Calls in Loan Against Mutual Funds
Margin calls in LAMF arise during market falls, making conservative borrowing and active portfolio monitoring critical for risk control.
Market downturns can reduce the value of pledged mutual fund units, increasing the risk of margin calls under a Loan Against Mutual Funds (LAMF). When collateral value falls below required thresholds, borrowers may need to repay part of the loan or provide additional security. Prudent investors mitigate this risk by borrowing well below the maximum eligible limit and monitoring portfolio movements. Apply Now