Top 5 Reasons to Choose a Loan Against Mutual Funds Over a Personal Loan
Looking for a loan but don’t want to pay sky-high interest rates? If you have mutual funds sitting idle in your portfolio, you might be overlooking one of the smartest financial tools available — a loan against mutual funds. It’s fast, flexible, and significantly cheaper than a traditional personal loan.
At Yenmo, we specialize in providing transparent, low-interest loans against mutual funds, helping you unlock liquidity without losing your investments.
What is a Loan Against Mutual Funds?
A loan against mutual funds (LAMF) is a secured loan where you pledge your mutual fund units as collateral in exchange for funds. You continue to earn market returns while getting instant liquidity — making it a smarter alternative to personal loans in many scenarios.
1. Significantly Lower Interest Rates
One of the biggest advantages of a loan against mutual funds is the much lower interest rate compared to personal loans.
While personal loans in India usually come with interest rates ranging from 12% to 24%, loans against mutual funds (like the ones offered by Yenmo) start at just 10.5% per annum.
| Loan Type | Interest Rate |
|---|---|
| Loan Against Mutual Funds (Yenmo) | 10.5% per annum |
| Personal Loan | 12% – 24% per annum |
2. No Foreclosure or Prepayment Charges
Most personal loans have prepayment penalties or foreclosure fees if you decide to repay early. At Yenmo, we believe in flexibility without penalties.
You can repay the principal at your convenience — partially or fully — without any extra charges.
3. Continue Earning Returns on Mutual Funds
When you take a loan against mutual funds, your investment doesn’t stop working for you. Since your mutual funds are just pledged and not sold, you continue to earn returns and NAV growth.
This dual benefit — liquidity and investment growth — makes this a powerful financial tool.
4. Instant and Hassle-Free Processing
Getting a loan against mutual funds through Yenmo is as easy as 1-2-3:
- No physical paperwork
- No credit score dependency
- Funds disbursed in hours, not days
5. Better Financial Discipline
With monthly interest-only payments and no EMI burden, a loan against mutual funds encourages responsible borrowing. You stay in control of your finances and choose when to repay the principal.
Quick Comparison: Loan Against Mutual Funds vs Personal Loan
| Feature | Loan Against Mutual Funds (Yenmo) | Personal Loan |
|---|---|---|
| Interest Rate | 10.5% p.a. | 12% – 24% p.a. |
| Credit Score Requirement | Not required | Mandatory |
| Collateral | Mutual Funds | Unsecured |
| Processing Time | Few hours | 1-3 days |
| Prepayment Fees | None | Yes |
| Investment Growth | Continues | NA |
When Should You Opt for a Loan Against Mutual Funds?
- You need quick access to funds but don’t want to disrupt your investments
- You want a lower-cost alternative to personal loans
- Your credit score is not strong enough for unsecured borrowing
Conclusion: A Smarter, Cheaper, and More Flexible Loan Option
If you’re holding mutual fund investments and need short-term liquidity, there’s no smarter option than a loan against mutual funds. And with Yenmo, you get unbeatable benefits: lowest interest rates, no hidden charges, and full repayment flexibility.
Visit Yenmo.in to check your eligibility and apply instantly.
