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March 2020
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If you have invested your hard-earned money in shares, mutual funds, securities, bonds and stocks, you can gain high returns, or you may lose all your money, as shares are always dependent upon the market fluctuations. But, supposedly you need some money to fulfil your financial requirements and you are not ready to break the mutual funds in the midway as you may face a loss. So, what can be the alternatives? You can apply for a loan against mutual funds up to Rs. 10 crores, without even breaking it. The interest rate of a loan against mutual fund is not so high, but to reduce the rate further, you can take the following steps:
Maintain a good credit score – Monitor your credit score or CIBIL score and maintain a high score to reduce the interest rate. It is better to have a credit score of 750 or more. You can enhance your credit score by early payment of your existing loans, and timely paying your credit card bills. Negotiate with the lender – You may refer your past timely repayment of loans and credit bills, to negotiate with your lender to reduce the interest rate. Survey the market – You must compare different lenders, enquire and search the best loan available in the market. The right loan offer will help you to get lower rate of interest. Read More:-How to get loan against mutual funds at lower interest rate?
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Mutual funds are one of the most sought-after investment options preferred by salaried and self-employed professionals. Did you know that you could avail a loan against your mutual fund instead of breaking it to fulfill any of your financial obligations? All you must do is find a suitable lender like a NBFC and financial institutions and pledge your mutual fund as security. The lender will run a background check on your security documents, your credit score and assess your pledged security. Based on which they will determine your home loan amount and eligibility. the amount could be up to 50-60% of the value of the pledged mutual fund. As an investor bear in mind few things to apply for a loan against shares. • Any default in the loan amount will lead you losing your invested money in the mutual fund. The lender has the right to sell your mutual fund and recover their loan amount.
• Loan can be taken against those mutual funds which do not have a lock-in period set. For eg., you cannot obtain a loan against ELSS or tax saving funds. • Such a loan can be taken only in the event of dire cash needs. It is advisable to not pledge your security for reasons such as making a big-ticket purchase, funding a vacation etc. There are simple eligibility criteria to avail this loan against mutual fund – borrower must be at least 25 years or above with a regular source of income like a job or business. The process needs you to provide basic documentation such as ID proof, address proof, document proof of securities and passport size photograph. Read More :- Important Tips to Help You Qualify For Loan Against Mutual Funds |