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Understanding Interest Costs and Risks in Loan Against Mutual Funds
LAMF offers lower interest rates but requires awareness of market-linked risks and margin maintenance during volatile periods.
While a Loan Against Mutual Funds offers flexibility, borrowers should understand associated interest costs and market-linked risks. If fund values fall sharply, lenders may request additional collateral or partial repayment. Responsible borrowing and maintaining adequate margins are essential. Compared to personal loans, LAMF interest rates are generally lower due to collateral backing. Apply Now