Should You Take Out a Loan Against Your Mutual Funds? | Invest Smart | Oneindia News

LOAN AGAINST MUTUAL FUNDS - By visiting a bank or a NBFC and pledging mutual fund units as collateral, you can get a loan against equity mutual funds, debt mutual funds, or hybrid mutual funds.

The loan is approved based on the folio's net asset value, the amount of the mutual fund units, and the loan term.

You may acquire a loan against mutual funds for about 10-11 percent each year, and because it's secured, the interest rate is significantly cheaper than a typical personal loan.

Negotiate a lower interest rate if you have a strong credit score and have been a bank customer for a long time.