Check LAMF Eligibility & Apply in Simple Steps

Taking a loan against mutual funds (LAMF) is quickly becoming a smarter alternative to personal loans in India. Instead of selling your mutual fund units, you can simply pledge them to get instant access to cash — all while your investments continue to stay invested and grow. 

This makes LAMF a convenient option for covering short-term needs like medical emergencies, education costs, or even business requirements. But before you jump in, it’s important to know whether you’re eligible and understand the steps involved in applying.

Key Takeaways

• Simple eligibility criteria: Indian residents with mutual fund holdings can apply.
• Fast, digital application: The process is paperless and can be completed online.
• Flexibility: Borrow funds without disturbing your investment growth.
• Transparency: Interest is charged only on the amount used.

Who is eligible to apply for a Loan Against Mutual Funds?

Eligibility for LAMF is designed to be straightforward, making it accessible to retail investors across India. The basic criteria include:

• Residency: You must be an Indian resident.
• Age: Most lenders require applicants to be at least 18 years old.
• Mutual Fund Holdings: You should hold mutual fund units (equity or debt) from AMCs empaneled with the lender.
• KYC Compliance: Ensure your mutual fund folios are KYC-compliant with updated PAN and Aadhaar.

What documents do I need to provide?

The beauty of LAMF lies in its minimal documentation. Since the loan is backed by your mutual fund investments, you don’t need to provide income proof or lengthy financial records. Generally, lenders ask for:

• PAN card
• Aadhaar card (or other government ID for verification)
• Mutual Fund folio details (linked to your PAN/KYC)

Many lenders fetch these automatically through digital APIs, making the process seamless.

How do I apply for a Loan Against Mutual Funds online?

Applying for LAMF is now a quick, end-to-end digital journey:

1. Visit the lender’s platform – For example, Quicklend’s platform offers a simple guided process.
2. Login with PAN and mobile number – OTP-based authentication ensures secure access.
3. Select the mutual funds to pledge – Choose eligible units from your portfolio.
4. Get an instant sanction – Based on the value of your pledged funds, a loan limit is sanctioned.
5. Withdraw as needed – Funds are disbursed directly into your bank account, and you pay interest only on the utilized amount.

How much can I borrow against my mutual funds?

Most lenders allow borrowing up to 60–70% of the Net Asset Value (NAV) of pledged units. The exact percentage depends on the fund type:

• Equity Mutual Funds: Usually 50–60% of NAV.
• Debt Mutual Funds: Higher margin, often 70–80% of NAV.

For example, if you have mutual fund units worth ₹5,00,000 in debt funds, you may be eligible for a loan of ₹3,50,000–₹4,00,000.

What are the benefits of choosing LAMF over personal loans?

• Lower interest rates compared to unsecured personal loans.
• No need to redeem investments – wealth creation continues.
• Pay interest only on usage, not the full sanction amount.
• Quick and paperless process, ideal for urgent needs.

Want to understand why LAMF could be a smarter choice than personal loans? Check out our in-depth guide here

Conclusion

A Loan Against Mutual Funds (LAMF) is a smart way to access funds quickly without having to sell your investments. The process is easy, with straightforward eligibility rules, minimal paperwork, and everything handled digitally for your convenience. Additionally, it is far more affordable and flexible compared to traditional loan options.