Today, many things can be done online. You can buy groceries or book movie tickets from your phone. Now, you can also apply for mutual fund loan online without going to a bank. You can do everything online in a few easy steps.
Many financial institutions and lending companies now allow you to apply for a loan against mutual funds online. This makes it easy for people who have invested in mutual funds to get money quickly when they need it. If you want to know how to get a loan against your mutual funds online, this guide will help you.
Why Take a Loan Against Mutual Funds?
Sometimes, you may need money quickly for an emergency. You can sell your mutual funds for cash, but this is not always a good idea. If you sell, you may have to pay extra charges and taxes. Also, you will lose your investment, which may affect your future plans.
Instead, you can take a loan against your mutual funds. This means you get money, but your mutual funds are not sold. Here are some benefits:
- Quick approvals and faster disbursal - get access to funds within a few hours or in a day
- No exit penalties or tax implications
- Continue earning tax-free growth on investments
- Flexible tenures and affordable interest rates
- Higher loan amount eligibility compared to other products
How to Get Mutual Fund Loan Online?
Getting a mutual fund loan digitally is now quicker and more convenient than ever. Online processes have cut down extensive documentation and lengthy verification normally associated with taking a loan. Follow these simple steps to apply for mutual fund loan online:
Step 1 - Determine Loan Eligibility
Most financial institutions provide up to 50-75% loan against the current market value of your mutual fund investments. Some factors that decide your maximum eligible loan amount are:
- Type of mutual fund scheme
- Fund value of investments
- Risk grade of the mutual funds
- Past performance and rating of the fund
Before starting the online application, you should determine the maximum loan you can get against your mutual fund folios and apply accordingly.
Step 2 - Select an Online Lender
There are many lending companies and financial institutions that provide the option to apply for mutual fund loan digitally. Compare and evaluate them on parameters like:
- Interest rates and processing fees
- Offered loan-to-value ratio
- Flexible repayment tenures
- Part-payment and foreclosure rules
- Turnaround times for online mutual fund loan application
We recommend checking the lender’s website for all details. Then, select one that best meets your loan requirements.
Step 3 - Start Online Application
Reputed lenders have an easy digital mutual fund loan application form available on their website. The online application form takes only 10-15 minutes to fill. The basic details needed are:
- Personal details - Name, PAN Card, Address
- Mutual fund statements - Scheme Name, Folio number
- Loan amount and tenure
- Bank account details for loan disbursal
Many lending portals also provide a mutual fund loan eligibility calculator. You can use this tool to get an estimate of the maximum loan amount and tenure you can get even before starting the application form.
Step 4 - Upload eKYC Documents
For quick verification, you need to electronically submit scanned copies or images of essential Know Your Customer (KYC) documents. This includes a PAN Card copy, income proof, Address Proof and the latest mutual fund scheme statements. New-age fintech lenders use advanced technology to read your PAN details using Optical Character Recognition (OCR) software for instant eKYC verification.
Step 5 - Sign Digital Agreement
Finally, the last step is to digitally sign the loan agreement shared by the loan provider. For this, you may need to provide an Aadhaar-based one-time password (OTP) authentication or submit an eSign using your Aadhaar card. Once both the applicant and provider sign, the deal is sealed. The instant mutual fund loan online application journey concludes here. Once approved, you will receive disbursal directly to your bank account within a few hours to a maximum of one working day.
Repayment Process
You can repay your loan against mutual funds in Equated Monthly Instalments (EMIs) through standing instructions via Electronic Clearance Service (ECS) or National Automated Clearing House (NACH) facilities. Many portals also allow part-payments, early repayments or online prepayments of the loan at any time.
Conclusion
Taking a quick loan against your investments is no longer a lengthy process, and you may apply for mutual fund loan online easily. Please follow the simple steps above to apply for mutual fund loan online in a completely paperless manner and get access to funds in record time without liquidating your instruments. Just select the right lender, provide the necessary information online, and get near-instant approval and fast disbursal.
FAQs
What is the process for applying for a loan against mutual funds online?
The online process involves 5 key steps - determining loan eligibility, selecting an online lender, filling the digital application form, uploading eKYC documents for verification and digitally signing the final loan agreement.
What documents do I need to provide when applying for a mutual funds loan online?
You need to provide scanned or digital copies of your PAN Card, Address Proof, income proof, and your latest mutual funds account statements when applying online.
How do I find lenders that offer online loans against mutual funds?
Many major banks, non-banking financial companies (NBFCs) and fintech lenders now provide the option to apply for a mutual fund loan completely online through their websites or mobile apps.
Is it safe to apply for loans against mutual funds online?
Yes, you may apply for loans against mutual funds online through various lending portals and companies. It is advisable to use platforms that have strong data security measures and encryption. Consider checking reviews of lender reputation and user feedback before applying.
How long does the online application process take?
Online application only takes 10-15 minutes to fill the form. Approvals happen within a few days, and funds are disbursed in usually a few hours or 1 working day.
Will I need to provide a signed agreement for the loan?
Yes, you need to provide digital eSign or Aadhaar OTP-based authentication to electronically sign the loan agreement sent by the financial institution.
Can I apply for a loan against multiple mutual funds at once?
Yes, just provide statements of all the mutual fund schemes you want to pledge while filling out the consolidated online application form.
How can I check the status of my loan application online?
Most lenders provide login access to a customer portal on their website to track and monitor the end-to-end status of your digital loan application.
Are there any fees associated with applying for a loan against mutual funds online?
Only nominal processing fees may be charged for online applications. Other than that, there may be prepayment or foreclosure charges on these loans.