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Getting instant provisional sanction for your loan

  • Interest is charged only on the utilised amount and for the utilised time period.

  • Long-term retention of Mutual Funds portfolio without liquidation.

  • End-to-end paperless disbursement.

  • Flexible repayment options

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Steps to apply for digital Loan

Against Mutual Funds

About Loans against Mutual Funds

Advantages of Loan Against Mutual Funds

Here are a few advantages of availing a Loan Against Mutual Funds:

  • High Loan-to-Value (LTV) ratio: If you take a Loan against Equity Mutual Funds, you can get up to 50% of the Net Asset Value (NAV) as the overdraft limit. With Debt Mutual Funds, this limit increases up to 80%.
  • Convenient and easy access to funds: A major advantage of availing a Loan against Mutual Funds is the convenience and easy access to funds. You can instantly pledge your Mutual Fund units to activate the Overdraft facility and withdraw the required funds in no time, subject to eligibility.
  • Low interest payment: The interest rate on these loans is attractive, significantly reducing the interest amount and the total loan cost. Since it is an Overdraft facility, you pay interest only on the amount used and for the number of days it is used.
  • No fund liquidation required: One of the biggest advantages of taking a Loan Against Mutual Funds is that you don’t need to liquidate your Mutual Fund investments. You can avail an Overdraft facility against the Mutual Fund units, while staying invested in them for the long term.
  • Capital appreciation: Investors opting for Loan Against Mutual Funds can enjoy potential capital appreciation of Mutual Funds while pledging them for a Loan.

Loan Against Mutual Funds FAQs

What is the tenure of a Loan Against Mutual Funds?

ICICI Bank Digital Loan Against Mutual Funds (MF) provides a loan repayment tenure of one year with the option of renewal based on the performance of the Overdraft Account after the initial year.

Which funds are accepted under a Loan Against Mutual Funds?

The Mutual Funds present in ICICI Bank’s approved list of Mutual Funds are accepted.

When will I receive the funds after applying for a Loan Against Mutual Funds?

Once your loan is sanctioned and the Mutual Funds are lien marked/pledged in favour of the Bank, the credit limit will be set in your Overdraft Account which you can start using.

What happens when my Mutual Fund price drops?

If your Mutual Fund price drops then your overall credit limit may decrease, which in some cases may lead to your account becoming overdrawn in case your outstanding balance becomes more than the revised credit limit. In that case, you can either lien/pledge more Mutual Fund units which will increase your credit limit or repay the excess amount that you have withdrawn to regularise the account. Please note that penal charges may be applicable on the overdrawn amount till the account is regularised.

When can I release my Mutual Funds?

You can release your Mutual Funds after repaying the amount which is due to the Bank or if you have a surplus limit available in your account which allows the Mutual Funds to be released.

Is it possible to make a part prepayment/foreclosure before the end of the loan tenure?

Yes, you can make a part prepayment of the amount utilised from the limit anytime, without incurring any charges.

What is the frequency of interest payments?

Interest is calculated on the daily outstanding balance and will be debited/charged to the LAS Account on the 2nd working day of every month for the entire interest period.

Is my interest applicable to the entire loan limit?

Since it is an Overdraft facility, the interest is applicable only on the limit utilised and for the number of days it is utilised.

Can I take a loan against my Mutual Fund investments?

Yes, ICICI Bank offers loans secured by Mutual Funds. You can apply online for this loan.

What is the interest rate of Loan Against Mutual Funds?

The rate is 10.75% - 11.75% per annum if you take a Loan Against Mutual Funds from ICICI Bank.

What amount can I get as a loan against my Mutual Fund units’ market value?

You can borrow up to 50% of the Net Asset Value (NAV) of the pledged Mutual Funds.

Note:

  • The minimum loan amount is ₹ 50,000.
  • The maximum loan amount is ₹ 20 lakh for Equity Mutual Funds
  •  For digital applications for a Loan against Debt Mutual Funds, the maximum loan limit is ₹ 1 crore. For branch or offline applications, there is no upper limit, subject to credit approval.

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