Debt can be a great alternative to mutual funds to meet short and medium term financial needs

Loan against mutual funds: As the popularity of mutual funds has increased, there has also been an increase in taking loans against it. Borrowers are preferring to take loans instead of their mutual fund investments due to attractive interest rates, convenient repayments and quick approvals.

Using Mutual Funds as Collateral

People are using mutual funds as collateral to take loans. Mutual fund investors are taking loans against their investment portfolio to meet their immediate and medium term funding needs. Which is a faster and easier process than a personal loan.

It is recommended to maintain long term investments due to loans taken against mutual funds. This enables one to get attractive returns on investment. Investors are increasing investments in mutual funds to meet future goals. Therefore early redemption cannot be done under loan against mutual funds. However, always consult financial advisors before making any financial decisions.

Benefits of loans compared to mutual funds

, Interest rate between 9 to 11 percent

, Exemption from termination fees and penalties

, Flexible Repayment Facility

, Faster and easier process compared to other loans

, Lower interest rates than personal loans