Key Differences of LAMF vs Personal Loan That Matter in 2026

Before listing the points, here is a quick reminder. Both products work well, but your income stability, investment habits, and urgency will decide which one fits better.

  1. Interest rates: LAMF usually offers lower rates because your MF units act as security. Personal loans are unsecured, so lenders charge more.

  2. Processing time: Both options are fast, but LAMF tends to be quicker if your mutual fund folio and KYC are already updated. Personal loans may involve deeper credit checks.

  3. Loan limits: With LAMF, the loan limit depends on the value of your mutual fund portfolio. Personal loan limits depend on your income and credit profile.

  4. Impact on investments: LAMF keeps your money invested. With personal loans, you do not need an investment, but you do not enjoy any market-linked growth during the loan period.

  5. Eligibility rules: LAMF depends on fund type, folio status, and KYC match. Personal loans rely more on credit score and income stability.

  6. Repayment flexibility: Personal loans follow fixed EMIs. LAMF can offer more flexibility depending on the lender’s structure.

How Lenders Evaluate Each Option

LAMF is assessed based on the value of your mutual funds, the category of the schemes, and your KYC accuracy. Lenders review equity, debt, or hybrid funds and apply loan-to-value ratios that usually fall between 50 and 80 percent. Since the loan is secured, the lender focuses more on the quality of your portfolio than your income.

For personal loans, lenders rely heavily on your credit score, salary stability, and repayment history. They check whether you can handle the monthly EMI without stress. Approval can be quick, but the interest rate will reflect how strong your financial profile looks to the lender.

Choosing Between LAMF and Personal Loan

These points highlight how to choose the best loan based on your actual needs in 2026.

  • When LAMF is better: If you already hold mutual funds and want lower rates with continued investment growth, LAMF gives you fast liquidity without breaking your portfolio.

  • When a personal loan is better: If you do not have investments or you prefer not to pledge anything, a personal loan offers a clean, unsecured credit route.

  • Factors that guide your final pick: Think about urgency, repayment comfort, interest cost, and whether you want to keep your wealth compounding in the market.