You can apply for Tata Capital’s mutual fund loan as an overdraft facility. You can also apply for loan against mutual funds in the form of term loan which will be issued online.
Now you can also take a loan against your mutual fund. For this, Tata Capital has started a scheme. The name of this scheme is ‘Loan Against Mutual Fund’. Through this scheme, customers can easily get loans ranging from Rs 5 lakh to Rs 2 crore. This is the first such loan of its kind. This is an ‘end-to-end digital’ loan. Under this, the loan is issued to the customer very soon.
Digital loan is being given in equity and debt schemes of all mutual funds. Tata Capital has said in a press release that the loan amount will be fixed on the basis of the units of the mutual fund and accordingly the loan will be given to the customer. The value of the unit will be decided based on the folio and tenure of the mutual fund and the loan will be released on that basis. There has been a sharp increase in the investment of mutual funds in the recent years. People are getting more inclined towards it. In view of this, Tata Capital has started the loan facility.
Tata Capital has said that this loan product has been started keeping in mind the needs of the people. If investors need funds in emergency, they will be able to run with this loan. The effect of the loan money will not be seen on the portfolio of the mutual fund. Customers will be able to take loans as per their convenience without making any changes in the portfolio.
The AUM of the Indian Mutual Fund Industry was Rs 15.18 trillion as on 31 July 2016 which increased to Rs 35.32 trillion as on 31 July 2021. That is, in the last 5 years, the AUM of mutual funds has registered more than double growth. Many fund houses have benefited from this growth. Along with this, investors are also getting the benefit of bumper returns. Returns of up to 200% have been seen on 1-year mutual funds. But market risk is high in such funds. People are investing money in the fund without taking into account these risks and getting returns.
You can apply for Tata Capital’s mutual fund loan as an overdraft facility. You can also apply for loan against mutual funds in the form of term loan which will be issued online. Its application will also be online only. If the term of a loan is more than 1 year, then the facility of auto renewal will also be available for it. However, the portfolio of mutual funds will be reviewed for auto renewal. Auto renewal will be decided on the same basis.