Loan Against Mutual Funds
Leverage your investments without selling them.
Your mutual fund investments are not just a long-term asset; they can also serve as an instant financial solution when you need quick and easy liquidity.
With our Loan Against Mutual Funds (LAMF) facility, you can leverage your investments without selling them, ensuring that your financial goals remain intact while you access immediate cash. Whether it’s for an emergency, business expansion, or personal financial planning, LAMF is the smarter way to borrow.
What is a LAMF?
A LAMF is a facility that allows you to pledge your mutual fund units as collateral in exchange for a loan. Instead of liquidating your investments, which might lead to capital gains tax implications and missed market opportunities, LAMF enables you to access funds while your investments continue to generate returns.
This financial tool is particularly beneficial for investors who require short-term funds but don’t want to disrupt their long-term financial strategy.
Why opt for a LAMF?
Need funds urgently? Unlike traditional loans, LAMF is processed quickly, with minimal documentation, so you can access cash within hours.
Selling mutual funds in times of financial need can result in tax liabilities and loss of future returns. With LAMF, your investments remain intact, continuing to work for you.
LAMF comes with highly competitive interest rates, much lower than personal loans or credit cards, making it a cost-effective borrowing option.
Borrow according to your needs and repay as per your convenience. You only pay interest on the amount utilized, ensuring better financial management.
When you sell your mutual funds, you not only lose your investment but also the potential future growth of your portfolio. With LAMF, your investments stay in place, generating returns while you meet your financial needs.
How Does LAMF Work for the Hum Fauji Initiatives Investors?
At Hum Fauji Initiatives, we are mindful of transparency and convenience. The process of applying for LAMF is simple:-
- We receive your application.
- Set up a call to understand the requirements & tenure.
- A designated product executive is assigned.
- The product executive connects with your designated financial planner.
- They set up a call to explain the process & approvals.
- Then submit your application and your loan amount is sanctioned within 48 hours of approval.
Why is a LAMF better than other Loans?
It works as a perfect overdraft facility. It offers better benefits as compared to Personal loans, Credit Card loans or other bank loans. The advantages of LAMF over other loans are: –
Quick Approval & Disbursement
Once approved, the loan amount is credited to your bank account within a few hours, maximum within 48 hours, but generally much lesser, maybe even 4-6 hours.
Continued Investment Growth
Your mutual funds remain invested, earning returns while you utilize the loan amount as per your needs.
Repay Flexibly
You can repay the loan at your convenience including prepaying or even extending your payment, ensuring financial discipline without burdening your cash flow.
The ownership of the investments remains with you; the loaning agency just has a temporary lien on them till the loan is cleared.
Why Choose Hum Fauji Initiatives for LAMF?
While multiple platforms offer LAMF, Hum Fauji Initiatives (HFI) provides a unique value proposition tailored to the needs of the armed forces community and their families. Here’s why taking LAMF through HFI is the best choice for you:
- Trusted & Personalized Financial Guidance
- Specialized for Armed Forces Personnel – We understand the financial needs of faujis and provide solutions that align with their service conditions and family responsibilities.
- No Complexities, Just Simple Solutions – Our team ensures that you get clear, straightforward, and efficient financial guidance.
- Competitive Interest Rates & Transparent Charges
- Best-In-Class Interest Rates – We ensure you get access to competitive rates in the market, helping you save on borrowing costs.
- No Hidden Fees – 100% transparency in processing fees, interest calculation, and loan terms.
- Hassle-Free & Paperless Process
- End-to-End Digital Loan Application – Complete your loan request without paperwork, ensuring a fast and seamless process.
- Quick Approval & Disbursal – Get approval within minutes, and funds are credited to your account swiftly.
- Flexible Loan Terms & No Prepayment Charges
- Borrow As Per your Need – Get a credit line and withdraw only the required amount instead of taking a lump sum loan.
- Repay at Your Convenience – Pay only for the amount you use, with the freedom to prepay without any penalty.
- Secure & Reliable Loan Process
- Lien Marking Without Selling Your Mutual Funds – You continue earning dividends and capital appreciation while using the units as collateral.
- Fast & Secure Process – All transactions are safe, and the lien marking is processed through regulated financial institutions.
- Exclusive Support for Armed Forces & Veterans
- Dedicated Customer Support – Our financial advisors are always available to assist you with any queries.
- Customized Loan Solutions – We provide financially disciplined borrowing strategies to help you make informed decisions.
Frequently Asked Questions (FAQs)
Yes, once your application is received, the assigned product executive can connect with your designated financial planner for details and discussions.
Generally, all open-ended equity and debt mutual funds are eligible though hybrid funds may also be included. Loan amount may vary depending on the type of fund and market conditions.
The loan amount depends on the type and value of your mutual fund holdings. Typically, equity funds allow up to 50% of the NAV, while debt funds can offer up to 70%. In hybrid funds, the loan amount depends on the allocation between equity and debt. The equity portion of the fund can provide a loan of up to 50% of its value, while the debt portion can offer a loan of up to 70%.
The approval process is quick and can be completed within a few hours, provided all required documents are in place.
Yes, you can prepay the loan anytime without any prepayment penalties, giving you full control over your financial decisions.
No, your mutual fund units remain in your portfolio. They are only pledged as collateral, and once you repay the loan, they are released back to you.
If the value of your pledged mutual funds declines significantly, you may be required to top up your collateral or repay a portion of the loan. Our team will guide you through this process if necessary.
Yes, you have the flexibility to choose when to repay the principal amount. After the month ends, only the interest needs to be repaid.
No, interest is only charged on the amount you withdraw and for the duration it is utilized. Interest is calculated daily based on the loan outstanding at the end of each day.
The process is entirely digital, requiring no physical documents. Ensure you have the following information:
- PAN card number.
- Email ID associated with CAMS and KFintech.
- Bank account details for verification and receiving the loan amount.
- Debit card or net banking details for setting up the mandate.
You can request the removal of the lien from your mutual fund units at any time, provided there is no pending loan amount against them. Depending on your current loan amount and utilization, you can choose to remove the lien from specific mutual fund units or from all the units you have pledged.
Get Started with a LAMF Today!
Don’t let liquidity concerns hold you back. Whether you need funds for business, education, emergencies, or any personal financial requirement, LAMF is your smart borrowing solution.
Contact us today to explore how LAMF can work for you!
If you’re an existing investor with Hum Fauji Initiatives, please contact your current Relationship Manager.
If you are connecting us new, please give a call to us on 9999053522 or email on business@humfauji.in
Leverage your investments, retain your growth, and secure instant liquidity—all with LAMF!
