Many investors sell their mutual funds during financial emergencies to arrange cash quickly. But selling investments can break long-term wealth creation and may also trigger tax liabilities. This is why Loan Against Mutual Funds (LAMF) has become one of the fastest-growing borrowing options in India.
With a loan against mutual funds, you can pledge your mutual fund units as collateral and get instant access to funds without redeeming your investments. Your mutual funds continue to remain invested and can still generate returns while you use the loan amount for your financial needs.
This guide covers the top apps for loans against mutual funds, their features, interest rates, loan limits, and important factors to consider before borrowing.
What is a Loan Against Mutual Funds?
A Loan Against Mutual Funds (LAMF) is a secured loan where your mutual fund units are pledged to the lender as collateral.
Instead of redeeming your investments, the lender places a lien on your eligible mutual fund units and provides a credit line based on their value.
Main Benefits
- Continue earning mutual fund returns.
- Lower interest rates than personal loans
- Faster approval process
- No need to sell investments
- Flexible withdrawal facility
Many platforms now provide digital lien marking and instant disbursal.
Top 7 Apps for Loans Against Mutual Funds
| App / Platform | Interest Rate Starts From | Maximum Loan Amount | Best For |
| Volt Money | Around 9% p.a. | Up to ₹5 Crore | Overall best LAMF platform |
| Groww Credit | Around 10% p.a. | Up to ₹15 Crore | Existing Groww investors |
| Paytm LAMF | 9.90% p.a. | Based on portfolio | Paytm users |
| INDmoney | Flexible | Based on holdings | Portfolio management users |
| Dhan DhanLAP | Around 10% p.a. | Based on eligibility | Traders & investors |
| Mirae Asset Financial Services | Around 10.25% p.a. | Flexible | NBFC-backed borrowing |
| Yenmo | Around 10.49% p.a. | Based on portfolio | Flexible repayment users |
Detailed Review of Best Loan Against Mutual Fund Apps
1. Volt Money
Volt Money is currently one of India’s most popular digital platforms for loans against mutual funds.
Features
- Interest rates starting around 9% p.a.
- Loan amount up to ₹5 crore
- Fully digital process
- Instant credit line setup
- Interest is charged only on the utilized amount.
The platform allows investors to check their eligible limit within seconds and complete digital lien marking without paperwork.
Why It Stands Out
Volt Money is known for fast approval and flexible withdrawal options.
2. Groww Credit
Groww has expanded beyond investing and now offers loan-against-mutual-funds services through its platform.
Features
- Loan eligibility based on mutual fund holdings
- Quick digital process
- Large credit limits available
- Continue earning mutual fund returns.
Groww users can access loan facilities directly through their investment ecosystem.
Also Read: 6 Ways to Utilize Your Instant Personal Loans
3. Paytm Loan Against Mutual Funds
Paytm provides a mutual fund-backed loan facility through lending partners.
Features
- Interest rates starting around 9.90% p.a.
- Instant disbursal
- Flexible repayment
- Pay interest only on the used amount.
The platform allows users to unlock liquidity without redeeming their mutual fund investments.
4. INDmoney
INDmoney has become popular among investors for portfolio tracking and wealth management.
Benefits
- Integrated investment dashboard
- Mutual fund-backed borrowing options
- Digital process
- Suitable for long-term investors
Many users prefer INDmoney because of its transparent investment management experience.
5. Dhan DhanLAP
DhanLAP offers loans against mutual funds and securities through partner lenders.
Features
- Loan amount starting from ₹25,000
- Digital application process
- Quick disbursal
- Flexible tenure options
The platform supports mutual fund and stock-backed lending facilities.
6. Mirae Asset Financial Services
Mirae Asset provides secured lending solutions against investment holdings.
Features
- Competitive interest rates
- Digital approval process
- Trusted NBFC platform
- Flexible borrowing structure
Suitable for investors seeking established NBFC-backed financing.
7. Yenmo
Yenmo offers flexible loan-against-mutual-fund solutions through lending partnerships.
Features
- Flexible repayment options
- Competitive interest rates
- Fast approval process
- Lower borrowing cost compared to many personal loans
Good option for short-term liquidity needs.
How Much Loan Can You Get Against Mutual Funds?
Loan eligibility depends on:
- Type of mutual fund
- Market value of holdings
- Fund category
- Lender policy
Typical LTV (Loan-to-Value) Ratio
| Mutual Fund Type | LTV Ratio |
| Debt Mutual Funds | Up to 80% |
| Equity Mutual Funds | Up to 50–60% |
| Hybrid Funds | Varies by lender |
Most lenders offer around 45%–60% LTV on equity mutual funds.
Why Loan Against Mutual Funds is Better Than Personal Loan
| Feature | Loan Against Mutual Funds | Personal Loan |
| Interest Rate | Lower | Higher |
| Collateral | Mutual Funds | No collateral |
| Approval Speed | Fast | Moderate |
| Investment Continues | Yes | Not applicable |
| Loan Limit | Based on holdings | Based on income |
LAMF is often cheaper than unsecured personal loans.
Also Read: 5 Best Credit Cards for Everyday UPI Payment
Conclusion
Loan Against Mutual Funds is becoming one of the smartest ways to access funds without disturbing long-term investments. Platforms like Volt Money, Groww Credit, Paytm, and Dhan provide fast digital borrowing options with lower interest rates compared to many personal loans.
However, borrowers should compare loan-to-value ratios, interest rates, processing charges, and repayment flexibility before pledging their mutual fund holdings. Proper planning helps you unlock liquidity while keeping your long-term investment goals intact.