Get Instant Liquidity Without Selling Your Investments
Pledge your mutual fund units and unlock cash at 9.5% p.a. — without redemption, without stopping SIPs, and without losing future NAV growth.
- ✓No Redemption
- ✓From 9.5% p.a.
- ✓SIPs Continue
- ✓Overdraft Facility
What is LAMF?
A Loan Against Mutual Funds (LAMF) is a secured credit facility where your existing mutual fund units act as collateral. The lender places a lien on your units via the Registrar and Transfer Agent (RTA) — you retain full ownership and your portfolio keeps growing.
Unlike selling your funds, LAMF triggers no capital gains tax and allows you to preserve the compounding power of your portfolio. It works as an overdraft — borrow what you need, pay interest only on what you draw, and repay whenever you have surplus funds.
No Redemption Needed
Pledge your mutual fund units as collateral without selling them. NAV growth continues on all pledged holdings.
Instant Liquidity
Funds credited to your bank within 24–48 hours of pledge creation — no branch visits, no paper queues.
Low Interest Rates
LAMF rates start at 9.5% p.a. — far cheaper than personal loans or credit cards because your funds secure the loan.
Overdraft Facility
Draw what you need and pay interest only on the amount withdrawn. Repay and redraw anytime within your limit.
SIPs Continue Running
Your SIP deductions and new unit additions continue after pledging. Long-term compounding stays on track.
No Prepayment Charges
Repay partially or fully whenever you have surplus — no foreclosure penalty after the initial lock-in period.
How to Get a Loan Against Mutual Funds
Four steps from linking your portfolio to receiving funds — entirely digital, no paperwork.
Link Your Mutual Fund Holdings
Connect your existing mutual fund portfolio to your Shriram account. Folios held across AMCs are visible in one dashboard.
Select Units to Pledge
Choose the fund(s) you want to pledge. The system calculates your eligible loan amount (LTV) based on current NAV.
Submit Pledge Request
Submit the pledge digitally — the AMC registers the lien on your units with the RTA. No physical forms required.
Receive Loan in Your Account
Once the pledge is confirmed, funds are credited to your linked bank account. Draw as little or as much as you need.
LTV Ratios — How Much Can You Borrow?
The loan amount depends on the Loan-to-Value (LTV) ratio of the funds you pledge. Debt funds command higher LTV; equity funds are more conservative.
| Fund Type | LTV Ratio | Examples |
|---|---|---|
| Equity Mutual Funds | 50–60% | Large-cap, mid-cap, flexi-cap, ELSS funds |
| Debt Mutual Funds | 70–80% | Liquid funds, short-term bond funds, gilt funds |
| Hybrid / Balanced Funds | 55–65% | Balanced advantage, aggressive hybrid funds |
| Index Funds / ETFs | 50–60% | NIFTY 50 index funds, SENSEX ETFs |
LAMF Interest Rates & Charges
Transparent pricing — no hidden fees. Interest accrues daily on the amount drawn; repay anytime to reduce costs.
| Fee / Charge | Rate | Note |
|---|---|---|
| Interest Rate | 9.5% – 11% p.a. | Reducing balance; varies by LTV ratio and fund type |
| Processing Fee | 0.5% – 1% | One-time, calculated on sanctioned credit limit |
| Stamp Duty | As applicable | Per state regulations on loan agreement |
| Margin Call Trigger | LTV breach | Issued when portfolio value drops below required LTV threshold |
| Foreclosure Charges | Nil | No penalty after initial 3-month lock-in period |
LAMF vs Personal Loan vs Selling Mutual Funds
Compare your three options for accessing liquidity — LAMF is usually the most cost-effective for investors with mutual fund holdings.
| Feature | LAMF | Personal Loan | Selling MF |
|---|---|---|---|
| Interest Rate | 9.5–11% p.a. | 10.5–24% p.a. | N/A — no loan |
| Processing Time | Same day | 2–7 days | T+3 settlement |
| Portfolio Impact | Units pledged, stay invested | No portfolio impact | Units redeemed permanently |
| SIP Continuity | Yes — uninterrupted | Yes — unaffected | No — units gone |
| Capital Gains Tax | No tax event | No tax event | STCG / LTCG applicable |
| Repayment Flexibility | Overdraft — repay anytime | Fixed monthly EMIs | No repayment needed |
| Future NAV Growth | Retained on pledged units | Unrelated | Lost — units sold |
| Credit Score Impact | Minimal (secured) | Moderate (unsecured) | None |
When to Use LAMF
LAMF works best for short-to-medium-term needs where preserving your investments is more valuable than selling them.
Medical Emergency
Cover unexpected hospitalisation costs immediately without disturbing long-term investments.
Home Renovation
Fund repairs or upgrades at low interest — no property mortgage or CIBIL score dependency.
Business Working Capital
Bridge short-term cash flow gaps without disrupting business operations or your investment portfolio.
Child's Education
Pay school, college, or overseas education fees without redeeming your SIP corpus mid-goal.
Bridge Loan
Get liquidity while waiting for FDs to mature, a property sale to close, or salary credit.
Opportunity Fund
Seize a time-sensitive investment — IPO, property deal — without liquidating existing positions.
Eligibility & Documents Required
LAMF is available to all Indian residents holding eligible mutual fund units. KYC must be complete.
Eligibility Criteria
- ✓Indian resident — individual, HUF, or company
- ✓Age 18 years and above with valid KYC (Aadhaar + PAN)
- ✓Mutual fund units held in demat or folio form
- ✓Minimum portfolio value of ₹50,000 in eligible funds
- ✓Units must be from SEBI-approved eligible fund list
- ✓Demat account linked with Shriram Financial Services
Documents Required
PAN Card
Identity and income tax verification
Aadhaar Card
KYC and address proof (e-KYC supported)
Bank Account Details
For loan disbursement and repayments
Mutual Fund Statement
Portfolio verification for eligible pledgeable units
LAMF Risks & What to Watch Out For
LAMF is low-risk for disciplined borrowers — but understanding the risks helps you use it wisely.
NAV Decline & Margin Call
If the market falls and your portfolio value drops below the required LTV threshold, we issue a margin call — you must add collateral or repay a portion.
Interest Accumulation
Running the overdraft for extended periods without repayment increases total interest costs. Plan repayments to minimise the interest outgo over time.
Forced Liquidation Risk
In extreme cases where a margin call goes unmet, the lender can sell pledged units. This triggers capital gains tax and permanently removes units from your portfolio.
Eligible Fund Restrictions
Not all mutual funds qualify for LAMF. Sectoral funds, close-ended schemes, and some NFOs may be excluded from the eligible fund list.
How Shriram Helps You Stay Safe
Real-time LTV Alerts
Get notified before a margin call is triggered — act early, not under pressure.
Expert RM Support
Our relationship managers review your LAMF setup and flag concentration risks proactively.
Flexible Overdraft Control
Draw only what you need. Limiting utilisation reduces margin call risk during volatile markets.
Frequently Asked Questions
-
What is Loan Against Mutual Funds (LAMF)?
LAMF is a secured loan where you pledge MF units as collateral. The lender places a lien via the RTA — you retain ownership and units keep earning returns, but cannot be redeemed until the lien is released on repayment.
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How much loan can I get against my mutual funds?
LTV varies by fund type: equity funds 50–60%, debt funds 70–80%, hybrid funds 55–65%. Pledge equity funds worth ₹10 lakh and receive ₹5–6 lakh in credit.
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Do my SIPs continue during the loan period?
Yes. Only the specific units pledged are locked. New SIP units added each month are not auto-pledged — your SIP corpus keeps growing alongside the pledged holdings.
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What happens if the NAV falls below the loan value?
If NAV drops and the loan exceeds the permissible LTV, Shriram issues a margin call asking for more collateral or partial repayment. Real-time LTV monitoring alerts you before forced action is needed.
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Can I repay the LAMF loan early?
Yes — LAMF is an overdraft facility. Repay any amount at any time without penalty after the initial lock-in (typically 3 months). Full repayment releases the pledge lien immediately.
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Is LAMF better than a personal loan for short-term needs?
For most investors with mutual fund holdings, yes. LAMF rates (9.5–11%) are lower than personal loans (10.5–24%), there are no EMIs, and your investments continue growing. The key advantage is that units are not sold — future NAV gains remain yours.
Still got questions?
Our LAMF specialists will help you understand pledging, LTV ratios, and margin calls before you apply.
Ready to Unlock Your Portfolio's Value?
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