A Loan Against Mutual Fund EMI Calculator helps you calculate the monthly installment (EMI) for loans secured against your mutual fund investments. This type of loan allows you to access liquidity without selling your mutual fund units, enabling you to continue benefiting from potential market gains while meeting your immediate financial needs.
How Mutual Fund Loan EMI is Calculated
Mutual fund loan EMI is calculated using the standard EMI formula:
EMI = [P × R × (1+R)^N] / [(1+R)^N-1]
Where: P = Principal, R = Monthly Interest Rate, N = Tenure in Months
Key Features of Mutual Fund Loans
- No Selling Required: Access funds without liquidating your investments
- Lower Interest Rates: Competitive rates from 9% to 18% per annum
- Flexible Tenure: Repayment periods from 12 months to 7 years
- High LTV Ratio: Up to 50-70% of mutual fund value as loan amount
- Continued Benefits: Keep earning from your mutual fund investments
- Quick Processing: Faster approval compared to unsecured loans
- Prepayment Option: Usually no penalties for early repayment
Eligible Mutual Funds for Loans
Eligible Fund Types:
- Large Cap Equity Funds
- Multi Cap Equity Funds
- Diversified Equity Funds
- Hybrid/Balanced Funds
- Debt Funds (some lenders)
- ELSS Funds (after lock-in period)
Non-Eligible Fund Types:
- Small Cap Funds
- Mid Cap Funds
- Sector/Thematic Funds
- International Funds
- ETFs (Exchange Traded Funds)
- New Fund Offers (NFOs)
Loan Against Mutual Fund Interest Rates
| Bank/NBFC |
Interest Rate |
Max LTV |
Processing Fee |
| HDFC Bank | 9.75% - 13.50% | 50% | 0.50% |
| ICICI Bank | 10.00% - 14.00% | 50% | 1.00% |
| Axis Bank | 10.25% - 15.00% | 60% | 1.50% |
| Kotak Mahindra | 11.00% - 16.00% | 60% | 2.00% |
| IndusInd Bank | 11.50% - 17.00% | 70% | 1.00% |
| Bajaj Finserv | 12.00% - 18.00% | 50% | Up to 3% |
Loan Against Mutual Fund Eligibility
- Age: 21 to 65 years for salaried, 21 to 70 years for self-employed
- Income: Minimum monthly income of ₹25,000 - ₹50,000
- Credit Score: CIBIL score of 650+ preferred
- Investment Tenure: Mutual funds should be held for at least 12 months
- Portfolio Value: Minimum portfolio value of ₹1-2 lakhs
- Fund Performance: Funds should have stable performance track record
Documents Required
Personal Documents:
- KYC Documents (PAN, Aadhaar)
- Address Proof
- Income Proof (Salary Slip/ITR)
- Bank Statements (6 months)
- Passport size photographs
Investment Documents:
- Mutual Fund Statements
- Portfolio Valuation Report
- Demat Account Statement
- AMC Account Details
- Investment Transaction History
Advantages of Mutual Fund Loans
- No Capital Gains Tax: Avoid tax implications of selling mutual funds
- Continue Investments: Keep benefiting from market appreciation
- Lower Interest Rates: Secured loans offer better rates than personal loans
- Flexible Repayment: Various EMI and tenure options available
- Quick Processing: Faster approval compared to unsecured loans
- No Credit Risk: Your mutual funds act as collateral
- Maintain Liquidity: Access funds without affecting investment strategy
Things to Consider
- Market Risk: If mutual fund value falls below loan amount, additional margin may be required
- Interest Cost: Compare loan interest rate with expected mutual fund returns
- Lock-in Period: Mutual funds remain locked until loan repayment
- Margin Calls: Be prepared for additional security if fund value decreases
- Prepayment: Consider prepaying if mutual fund performance is poor
Tips for Mutual Fund Loan Planning
- Choose stable, large-cap funds for higher LTV ratios
- Monitor your mutual fund performance regularly
- Keep additional margin ready for market volatility
- Compare interest rates from multiple lenders
- Consider shorter tenure to minimize interest cost
- Use the loan for productive purposes rather than consumption
- Have a clear repayment plan before taking the loan
Frequently Asked Questions
What is the maximum loan amount against mutual funds?
You can typically get 50-70% of your mutual fund portfolio value as loan amount, with maximum limits varying by lender.
Can I sell my mutual funds during the loan tenure?
No, your mutual fund units are pledged to the lender and cannot be sold until the loan is fully repaid.
What happens if my mutual fund value decreases?
If the fund value falls significantly, the lender may ask for additional security or partial loan repayment to maintain the LTV ratio.
Are dividends from mutual funds accessible during loan tenure?
Usually, dividends and capital gains are credited to your account, but some lenders may adjust them against the loan outstanding.