🔑 Key Features
| Feature | Description |
|---|---|
| Loan Type | Secured loan |
| Collateral | Listed shares, mutual funds, bonds, insurance, ETFs, etc. |
| Loan Amount | Typically 50–80% of the market value of pledged securities |
| Tenure | Up to 12–36 months (renewable) |
| Interest Rate | 9% – 14% per annum (varies by lender) |
| Ownership of Assets | You retain ownership; only a lien is created |
| Repayment | Interest-only EMIs or flexible overdraft-like facility |
📈 Common Securities Accepted
| Type of Security | Notes |
|---|---|
| Equity Shares | Must be listed on recognized stock exchanges |
| Mutual Funds | Both equity and debt mutual funds (NAV-based lending) |
| Bonds / Debentures | Government or PSU bonds, tax-free bonds |
| Insurance Policies | Only traditional policies with surrender value (e.g., LIC) |
| Exchange-Traded Funds (ETFs) | Marketable and liquid instruments |
| Sovereign Gold Bonds (SGBs) | Some lenders accept these as collateral |
Apply Loan
📋 Documents Required
PAN & Aadhaar
Latest holding statement (from demat or mutual fund)
Income proof (sometimes optional for low amounts)
Demat account and bank account details
Signature verification and lien creation form
✅ Benefits
💰 Access funds without selling your investments
🔁 Revolving facility like overdraft—withdraw and repay as needed
💹 Continue to earn dividends or capital gains (except on some pledged assets)
📉 Lower interest rates than personal loans or credit cards
🧾 Simple documentation and fast processing
🧮 Example – Loan Against Mutual Funds
| Mutual Fund Value | ₹10,00,000 |
|---|---|
| LTV (70%) | ₹7,00,000 |
| Interest Rate | 11% p.a. |
| Monthly Interest | ₹6,417 |
| Tenure | 12 months |