Loan Against Mutual Funds ICICI Bank: Eligibility, Documents & How to Apply
A loan against mutual funds allows you to borrow money using your fund units as collateral. You maintain ownership of the units but forfeit the right to sell them while the loan is active. To pledge units, you must usually request a lien from your mutual fund registrar. If you default, the bank can enforce the lien and sell your units through the Asset Management Company (AMC) to recover the loan amount.
This type of loan operates on the Loan to Value (LTV) concept and is usually available for both Equity and Debt Funds. The loan amount is determined based on the chosen tenure. Margin requirements and loan terms vary among banks. Today, we’ll explore ICICI’s Loan Against Mutual Funds on smallcase. Let’s begin.
Loan Against Mutual Funds ICICI Bank at smallcase
Splitting your investments disrupts the compounding effect. Preserve long-term wealth over short-term gains. Leverage your investments as collateral for a loan, sustaining their growth while addressing immediate financial requirements. Explore smallcase for accessing loans against your ICICI mutual funds.
Unlocking a mutual fund loan via smallcase is simple. Eligible individuals aged 18-70, including self-employed or salaried residents, can apply for loans up to ₹5 Crore against approved Mutual Funds held with CAMS & KFintech.
How to Get Loan Against Mutual Funds ICICI Without Selling Your Investments on smallcase?
You can now quickly establish an emergency credit line using your mutual fund investments without selling them at smallcase. Access cash within 3 hours through smallcase, using your mutual fund holdings as collateral at a 10.75% annual interest rate.
To secure a Loan Against Mutual Funds (LAMF) on smallcase, follow these straightforward steps:
- Download the smallcase app.
- Import your ICICI mutual fund holdings into smallcase.
- Confirm your loan amount (you can opt for a partial amount).
- Enter your bank details.
- You should receive the funds in your bank account in less than 3 hours.
- In case of any delays or for further assistance or inquiries, contact the smallcase support team at help@smallcase.com.
Discover the benefits of Loan Against Mutual Funds (LAMF) tailored to your financial needs to achieve your goals and secure a prosperous future.
What is Loan Against Mutual Funds (LAMF)?
Mutual funds, like other assets such as gold or property, can be used as collateral for loans. Through smallcase, you can leverage your mutual funds to secure a loan at a competitive interest rate of 10.75% per annum.
With smallcase, you can digitally lien mark your mutual funds, enabling instant access to a loan without the need to sell or redeem your investments. This loan, provided as an overdraft facility, offers flexibility in accessing funds and repayment without additional fees. Interest on the loan against mutual funds from SBI is charged only on the amount utilized and for its duration.
You have the option to choose from a range of approved SBI mutual funds offered by various asset management companies in India as collateral. CAMS and KFintech (formerly KARVY) act as reliable Registrars & Transfer Agents (RTAs) to secure the loan against your mutual funds.
Exploring the smallcase SBI loan against mutual funds can be a wise choice for those seeking short or medium-term financial solutions by pledging their SBI mutual funds.
Note: This information regarding interest rates was updated on April 19th. For the latest updates on interest rates, fees, and charges, visit the smallcase help centre for LAMF.
Documents Required to Avail an ICICI Loan Against Mutual Funds at smallcase
You can seamlessly apply for an ICICI loan against mutual funds through the smallcase app’s fully digital process. The required documentation includes:
- PAN information
- Phone number/email linked to your mutual funds
- Aadhar Card (for some users)
- Bank account information for fund transfer
- E-sign the online loan agreement and then submit it for loan approval
Once approved, the funds will be reflected in your account within 3 hours. If you need more information, you can always contact help@smallcase.com.
Will my ICICI Funds Still Generate Returns After Being Pledged for Loans?
Yes, you’ll keep earning returns on your ICICI funds once you pledge them as loan collateral. Yet, you can’t redeem or sell these funds once pledged on smallcase. You’ll need to wait until the loan is repaid to do so.
Can You Sell Your ICICI Funds After Pledging For Loans on smallcase?
No. You can only generate investment returns after using them as loan collateral. You can redeem or sell your ICICI fund investments only after repaying the loan in full.
What Happens in the Case of Active SIPs or Invest More (Lumpsum Investments) in Pledged ICICI Mutual Funds?
Investors can increase their investments in pledged mutual funds without affecting their control. Whether through lump sum or SIP orders, additional investments remain separate from the pledge.
When funds are pledged for loans via smallcase, any ongoing Active System Transfer Plan (STP) or Systematic Withdrawal Plan (SWP) initiated by the investor gets temporarily suspended.
Maximum Loan Limit on Your ICICI Mutual Fund Investments
Your credit limit is determined by the value of your eligible mutual funds, serving as your maximum borrowing capacity. This limit is calculated by applying a percentage based on the type of mutual funds you choose as collateral.
Equity mutual funds enable borrowing up to 45%, while debt mutual funds allow up to 75%. At smallcase, ICICI offers loans against mutual funds starting from ₹25,000 and extending up to ₹5 crores. For the most recent information, refer to our smallcase Loan Against Mutual Funds (LAMF) help center.
Terms of Loan Closure, Charges & Interests for ICICI Loan Against Mutual Funds on smallcase
After repaying the principal and accrued interest, you can close the loan without additional fees. Once closed, you retain the credit limit and can withdraw funds as necessary, only incurring interest on withdrawals. Additionally, you have the option to release the collateralized mutual funds, allowing you to redeem or sell them. Refer to the table below for details on additional fees, charges, and interest rates for ICICI loans 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 |
Note: This information was updated on April 19th. For the latest updates on interest rates, fees, and charges, visit the smallcase help centre for LAMF.
Why Get an ICICI Insta Loan Against Mutual Funds?
Borrowing against mutual funds offers a dual benefit: preserving investments while meeting financial needs simultaneously. By pledging mutual fund units, investors retain potential returns and may access additional funds through top-up loans if the unit value increases.
This secured credit option typically features competitive interest rates, making it more cost-effective than personal loans or credit cards. Interest accrues solely on the utilized loan amount, payable through manageable Equated Monthly Installments (EMIs).
Applying for a loan against mutual funds is streamlined and can be done online, ensuring swift processing and disbursal to address immediate financial requirements.
In summary, leveraging mutual funds for loans provides investors with a practical solution for short-term financial demands. However, it’s essential to compare terms and conditions beforehand. With proper information and comprehension, borrowing against mutual funds can serve as a valuable financial strategy.
To Wrap It Up…
In conclusion, understanding the concept and benefits of ICICI Bank’s Loan Against Mutual Funds at smallcase can empower investors to make informed financial decisions. Individuals can access funds for various short-term needs by leveraging their mutual fund investments while preserving their investment portfolio. However, it’s crucial to thoroughly research and compare terms and conditions before opting for this financial solution. With the right knowledge and awareness, borrowers can effectively utilise ICICI Bank’s Loan Against Mutual Funds at smallcase to address their financial requirements.
FAQs
Yes. You can consider smallcase for this! Simply import your ICICI funds to smallcase and check the maximum eligible loan amount. You can then apply for a loan right away on the smallcase app. You can also avail a loan against any other mutual fund holdings you might have.
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.
The loan against ICICI mutual funds at smallcase typically lasts for 36 months, but you’re free to pay it off early without facing any extra charges. Plus, you can extend the loan beyond the initial 36 months if you need more time.
No. There are no lien removal charges if you request one after pledging your ICICI mutual funds for a loan.
The default tenure of the loan repayment against ICICI mutual funds at smallcase is 36 months.Â
Note: This information regarding interest rates was updated on April 19th. For the latest updates on interest rates, fees, and charges, visit the smallcase help centre for LAMF.
