Borrow against the portfolio, keep the portfolio
The lender marks a lien on the units with the registrar, or a pledge on shares in your demat account, and sanctions a credit limit as a percentage of the pledged value. That percentage differs for equity and debt holdings and is set by the lender.
Interest is normally charged only on the amount you actually draw and for the number of days you use it, which makes it very different from a term loan disbursed in full on day one.
The pledged value moves with the market. If it falls below the lender's threshold, a margin call requires you to add securities or repay part of the limit. Sanction, limit and rate are entirely the lender's decision.
The paperwork side of it
- Lien or pledge marked digitally, usually within a working day
- Interest charged on the drawn amount and utilised days
- SIPs and holdings continue; growth and dividends remain yours
- No end-use restriction other than those prescribed by law
- Release of lien on closure, handled end to end
Volt Money · Varicash (NBFC lending partners)
Before you sign anything
No. The units stay in your folio under lien. You continue to bear the market risk and receive any appreciation or distribution.
If the market value of pledged securities falls below the lender's prescribed cover, the lender asks you to pledge more or repay part of the outstanding. If unmet, the lender may invoke the lien and sell.
No. Eligibility, limit, rate of interest and processing fees are decided solely by the lending institution as per its credit policy.
Loan products are facilitated on a referral basis. Abhilasha Wealth is not a lender and does not sanction credit. Eligibility, sanctioned amount, rate of interest, tenure and all charges are decided solely by the bank or NBFC as per its credit policy. Credit at sole discretion of the lender, subject to terms and conditions.
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Have a question about Loan Against Mutual Fund and Shares?
Call us during working hours or send a WhatsApp message. We will walk you through the documents, the costs and the process before anything is signed.