Loan Against Mutual Funds (LAMF)

Check eligibility & eligible schemes
Not every mutual fund scheme or platform is accepted. Banks/NBFCs list eligible AMCs/schemes (some accept only CAMS-registered schemes, some only their own AMC). Confirm before applying. 

Choose lender & product
Pick a bank, NBFC or fintech that offers Loan Against Mutual Funds (LAMF)  (many offer overdraft facilities or loan-against-securities products). Compare LTV, interest rate, fees and tenure. Typical interest ranges vary by lender and profile. 

Apply & submit documents
Apply online/branch. Usual documents: identity, PAN, bank account, mutual fund folio details (and matching PAN/name), proof of holdings (CAMS/KFin/statement). Some lenders require you to have the MF units registered with specific registrars (CAMS/KFin). 

Pledge/creation of lien
Lender places a lien/pledge on the mutual fund holding (electronically via registrar — not a physical handover). Your folio shows the pledge; you still earn dividends and benefit from NAV changes. LTV (Loan-to-Value) calculation & sanction
Lender values your pledged units at current NAV and applies an LTV margin. Typical LTVs:

• Equity / hybrid / ETFs: ~50% (i.e., you can borrow up to ~50% of NAV).

• Debt / FMP / liquid funds: higher, sometimes up to 75–80%.
  Exact % depends on lender and fund type. 

Disbursal
Loan is disbursed (or overdraft limit created) into your bank account. Many lenders charge interest only on the amount you actually use (for overdrafts). Ongoing monitoring / margin calls
If NAV of pledged units falls and your outstanding loan exceeds allowed LTV, the lender may ask for additional margin (top-up) or partially liquidate pledged units to bring the account within limits. This is the main operational risk. Repayment and release
Repay principal + interest per the agreement (monthly interest, EMIs or overdraft settlements). Once fully repaid, the lender removes the pledge and units are free.