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Tax Efficiency Benefits of Loan Against Mutual Funds
Loan Against Mutual Funds avoids capital gains tax triggered by redemption, offering investors a more tax-efficient way to access short-term liquidity.
Redeeming mutual funds can trigger capital gains tax, especially during volatile markets. Loan Against Mutual Funds avoids this by providing liquidity without sale. Since ownership of investments remains unchanged, no tax event is created at the time of borrowing. Interest costs may apply, but overall tax efficiency often improves compared to redemption. Apply Now