Compare total interest, not only the EMI.
Loan Against Mutual Funds Calculator
Estimate an illustrative loan against mutual-fund units. Adjust the assumptions, inspect the chart and read the complete guide below.
02 Your projection
Indicative available credit limit₹7.50 LUpdates instantly as you edit
LTV-based maximum eligibility₹10.50 L
Monthly interest on utilisation₹6,875
Stress-case margin shortfall₹0
Projection journeyHover to inspect a year
Interest is calculated only on the assumed utilised amount. A market fall can reduce collateral cover and may require repayment or additional security.
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Five smart nudges
Use the result with context.
Check the lender’s APR and key fact statement before signing.
A longer tenure lowers EMI but usually increases total interest.
Keep room in the monthly budget for rate resets and emergencies.
Include processing, legal, insurance and closure charges in the comparison.
Understanding Loan Against Mutual Funds in India
Editorially reviewed 12 July 2026 · Rules and assumptions can change
Equity and debt funds support different limits
LAMF pledges eligible mutual-fund units without an immediate redemption. Equity funds generally receive a lower LTV than eligible debt funds because NAV volatility differs. This calculator values the two buckets separately rather than applying one haircut to the entire folio.
The lender’s approved scheme list, lien process and caps control actual sanction. Tax classification and collateral classification are separate questions.
NAV fall and margin shortfall
If ₹12 lakh of equity funds support 50% LTV, the initial borrowing base is ₹6 lakh. A 20% fall reduces fund value to ₹9.6 lakh and support to ₹4.8 lakh. A fully used ₹6 lakh limit is then ₹1.2 lakh above that assumption before any lender-specific buffer.
The lender may request cash or additional units or redeem pledged units. Maintain a large margin and never treat the maximum limit as safe utilisation.
LAMF versus redeeming units
A loan preserves market exposure and may defer a sale, but adds interest, fees and margin-call risk. Redemption has no interest cost but can realise capital gains and removes future participation. Compare the expected borrowing period and after-tax consequences rather than assuming a loan is always tax-efficient.
For a long funding need, cumulative interest can exceed the benefit of avoiding sale. A short, clearly repayable cash mismatch is a more natural use case than financing consumption indefinitely.
Operational checklist
Verify eligible schemes, equity/debt LTV, utilisation interest, renewal, lien marking, margin notice, liquidation and de-lien timeline. Ensure the folio ownership matches borrower requirements.
Stress equity and debt values separately, identify an external repayment source and monitor NAV and alerts. The calculator excludes scheme-specific haircuts, taxes on forced redemption and daily interest conventions.
Official sources used for this guide
Rates, thresholds and rules can change after the review date. Check the linked authority and the provider’s current documents before acting.
Loan Against Mutual Funds calculator FAQs
Are units sold when the loan starts?
Normally eligible units are lien-marked or pledged, but the lender can redeem under default or margin terms.
Why is debt-fund LTV often higher?
Eligible debt funds may have lower expected NAV volatility, though lender policy and scheme risk still control.
Does borrowing avoid tax permanently?
It may avoid an immediate voluntary redemption, but later or forced redemption can still create tax.
Should I use the entire sanctioned limit?
A utilisation buffer is prudent because NAV declines can reduce permitted borrowing.
Is LAMF suitable for long-term spending?
Ongoing interest and margin risk can make prolonged utilisation unsuitable; compare redemption and other funding.