Common Mistakes Investors Should Avoid When Taking a Loan Against Mutual Funds

While loan against mutual funds offers flexibility, misuse can create financial stress. One common mistake is overleveraging by borrowing close to maximum LTV limits, leaving little buffer for market volatility. Ignoring margin call risks and failing to monitor portfolio value can lead to forced liquidation. Some borrowers also treat LAMF as long term debt, increasing interest costs unnecessarily. Borrowing without a clear repayment plan reduces the benefit of lower interest rates. Apply Now