Any idle financial asset can be used to take a loan. In the same way, the Mutual Funds or shares of the stock market can get you a loan as well and that is a loan against mutual fund and shares
Financial institutions are not just limited to lending loans to applicants who are looking forward to making purchases; they also offer loans to the people who are in need of emergency funds. Loan against Mutual Funds and Shares is a great way to get financial aid without losing the financial assets.
What Needs to be kept in Mind While Taking Loan Against Mutual Fund
- Lower interest rates: Interest rates play a vital role in any loan. It is basically a sum that the lender charges for the loan on a yearly basis. Due to the pledged Mutual Funds and/ or shares, these loans will have lower interest rates in comparison to other lending products.
- No specific purpose: The loans which are offered to the applicants can be used for any purpose by them. Just like personal loans, the lenders do not ask you the purpose of the loan for approval. This means you can use the amount to purchase a house or to settle an old debt or finance a medical emergency.
- No Pre-payment charges: At Abhiloans, the minimum tenure for one year, which can be extended by paying a particular amount. Since the tenure is already low, we do not charge the applicants for pre-payment.