Aditya Birla Loan Against Mutual Funds: How to Apply, Eligibility & Documents
Investors choose mutual funds for their convenience, diversification, and potential for long-term growth. In addition to cost efficiencies and liquidity during financial downturns, mutual funds offer benefits such as loans against Mutual Fund units (LAMF), enabling investors to leverage their existing mutual fund investments. So, if you find yourself invested in Aditya Birla Mutual Funds, and have considered selling them for the immediate need of funds, look no further! smallcase now offers a platform for investors to pledge their Aditya Birla (or otherwise) Mutual Funds as collateral to get a loan against them. Let’s learn more!
Loan Against Aditya Birla Mutual Funds on smallcase
Splitting your investments can limit the power of compounding. Instead of focusing solely on short-term profits, you may consider prioritising long-term wealth. One strategy is to leverage your investments for a loan, allowing them to continue growing while meeting immediate financial needs. Utilising smallcase, you can secure a loan against your Aditya Birla mutual funds.
Getting a mutual fund loan through smallcase is straightforward. Eligible individuals aged 18-70, including self-employed and salaried residents of India, can apply for loans up to ₹5 Crore against approved Mutual Funds held with CAMS & KFintech.
How to Get a Loan Against Aditya Birla Mutual Funds Without Selling Your MF Investments?
You can leverage your mutual fund investments to quickly establish an emergency credit line without liquidating your holdings. With smallcase, you can access emergency funds within 3 hours, using your mutual funds as collateral, with an interest rate of 10.75% per annum.
Securing a Loan Against Mutual Funds (LAMF) through smallcase is simple. Just follow the steps provided below:
- Download the smallcase app.
- Import your mutual fund holdings.
- smallcase will assess your holdings and display the maximum eligible loan amount from Aditya Birla.
- Confirm your desired loan amount (you can choose less than the maximum if preferred).
- Provide your bank account details.
- Receive funds in your bank account within 3 hours.
For assistance, contact smallcase support at help@smallcase.com if needed.
Loan Against Mutual Funds (LAMF) offers tailored benefits for specific financial needs. Explore its potential to achieve your financial goals and secure a prosperous future.
Note: This information regarding interest rates was updated on April 22nd. For the latest updates on interest rates, fees, and charges, visit the smallcase help centre for LAMF.
What is a Loan Against Mutual Funds (LAMF)?
Just like traditional assets such as gold or property, Mutual Funds (MFs) can also be used as collateral for a loan. With smallcase, you can easily leverage your MFs as collateral at a competitive interest rate of 10.75% per annum.
Through smallcase, you can digitally lien mark your mutual funds, granting instant access to a loan without the need to sell or redeem your investments. This loan, functioning as an overdraft facility, provides flexibility in fund access and repayment without additional fees. Interest on the loan against mutual funds in Aditya Birla is only charged on the utilised amount for the duration it is utilised.
Aditya Birla offers a range of approved mutual funds from various asset management companies in India that can be used as collateral. CAMS and KFintech (formerly KARVY) act as dependable Registrars & Transfer Agents (RTAs) to secure the loan against your MFs. For individuals seeking short or medium-term financial solutions by pledging their Aditya Birla MFs, exploring the smallcase Aditya Birla loan against MFs can be a wise choice.
Note: This information regarding interest rates was updated on April 22nd. For the latest updates on interest rates, fees, and charges, visit the smallcase help centre for LAMF.
Will the Aditya Birla Mutual Funds Still Generate Returns After Being Pledged?
Certainly! Although you can continue to earn returns on your Aditya Birla mutual fund investments after using them as collateral for a loan through smallcase, you cannot sell or redeem these funds until the loan is fully repaid.
Can You Sell Your Aditya Birla Mutual Funds After Taking Loan Against Them?
No. Although you can continue earning returns on your Aditya Birla Mutual Funds even after pledging them as collateral, you cannot sell/redeem those mutual funds until the loan is repaid.
What Happens in the Case of Active SIPs or Invest More (Lumpsum Investments) in Pledged Aditya Birla Mutual Fund?
Investing more in pledged mutual funds, either as a lump sum or through SIP orders, won’t affect your investments. You will retain complete control over these investments, as they don’t automatically become pledged.
Additionally, when you pledge funds for loans on smallcase, any Active System Transfer Plan (STP) or Systematic Withdrawal Plan (SWP) you’ve initiated gets temporarily paused or cancelled.
Maximum Loan Limit on Your Aditya Birla Loan Against Mutual Funds
Your credit limit is the highest amount you can borrow by leveraging your eligible mutual funds. The borrowing amount is determined by applying a percentage to the value of the mutual funds you wish to use as collateral. Equity mutual funds have a borrowing percentage of 45%, while debt mutual funds have a borrowing percentage of 75%. The minimum loan amount available against mutual funds at smallcase is ₹25K, while the upper limits are set at ₹5 Cr.
Terms of Loan Closure, Charges & Interest
After paying off the principal and accrued interest each month, you can close your Aditya Birla loan against mutual funds without additional fees. Once closed, you retain your credit limit and can access funds as required, with interest applied solely on withdrawals. Furthermore, closing the loan allows you to release the collateralised mutual funds, giving you the freedom to redeem or sell these investments.
Here’s a table of other fees, charges & interest rates that you might want to check out if you are considering availing your Aditya Birla loan against mutual funds on smallcase:
| Fees & Charges | Details |
| Processing Fee | ₹999 or 1% of loan amount, whichever is higher, up to a maximum of ₹4999 (plus GST) |
| Late Payment Interest | Penal Interest: 2% per month |
| Bounce Charges | ₹1200 per bounce |
| Annual Renewal Charges | None |
| Loan Top-Up Charges | None |
| Part-Prepayment Charges | None |
| Foreclosure Charges | None |
| Mandate Inactive Charges | None |
| Mandate Verification | Charged by your bank (typically between ₹0 to ₹150) |
| Lien Removal Charges | If requested after taking loan: None If loan is canceled before disbursement: Actual processing fee applicable |
| Security Swap Charges | None |
| Collection/Legal Charges | In case of default: Actuals |
To Wrap It Up…
In conclusion, Aditya Birla Loan Against Mutual Funds on smallcase offers investors a convenient option to unlock the value of their mutual fund investments without feeling the need to liquidate them. By leveraging their mutual fund holdings, individuals can access funds for various financial needs, such as emergencies, education, or business expansion, while benefitting from potential market growth and continuing to earn returns on their investments.
Frequently Asked Questions (FAQs)
Yes. You can easily transfer your Aditya Birla funds to smallcase and instantly discover your maximum loan eligibility. You can apply for a loan directly through the smallcase app. Plus, you can also leverage your other mutual fund holdings for loans at smallcase.
Your credit limit corresponds to the highest loan amount you can obtain using your eligible mutual funds as collateral. It’s determined by applying a percentage to the value of your chosen mutual funds. Equity mutual funds allow for a 45% lending percentage, whereas debt mutual funds allow for an 75% lending percentage at smallcase.
At smallcase, you can borrow against your Aditya Birla mutual funds for up to 36 months, with no penalty for early repayment. You also have the option to extend the loan beyond the initial 36 months if necessary.
No. If you request one after pledging your Aditya Birla mutual funds for a loan, there are no lien removal charges.
The default tenure of loan repayment for LAMF at smallcase is 36 months.
Note: This information regarding interest rates was updated on April 22nd. For the latest updates on interest rates, fees, and charges, visit the smallcase help centre for LAMF.
