Skip to content
Home » A Quick Way to Get the Property You Have Always Dreamed Of – A Housing Loan Against Mutual Funds!

A Quick Way to Get the Property You Have Always Dreamed Of – A Housing Loan Against Mutual Funds!

Home loan against mutual funds

Mutual funds are a great tool for diversifying your investments. You can invest in dozens of different stocks, bonds, and other securities with one purchase. They’re professionally managed, so you can sleep well at night not managing any of the underlying assets. Funds are more liquid than individually held assets because they tend to be less volatile – you can sell all or part at any time. In some cases, you may have access to certain types of banks and insurance companies that only do business with larger investors, perhaps raising tens of millions of dollars per year via mutual funds. We bet many of you might have already known half of these facts, but did you know that you can also get housing loans on Mutual Funds?

Build Your Home Without Losing Your Assets

Most people don’t even have an idea about this specific loan plan. This is one of the most overlooked options by investors but can be a quick way to boost your finances. Imagine this – let’s say you have booked losses in your mutual fund portfolio and do not have enough remaining assets to meet your monthly outgoings. You can pledge your mutual fund holdings with a bank or NBFC and take home a loan against a portion of their value. Since you are pledged as collateral, there is no stress on you to provide additional security like in the case of a gold or real estate loan where you have to mortgage the asset itself.

Why Housing Loan Against Mutual Funds is an Ideal Option for You

An investment in a Mutual fund is an ideal way to grow your money. But having realized the gains, there may be a need to have those gains at your disposal. In such situations, pledging mutual fund holdings for a loan makes complete sense. When you choose to borrow money to buy a house, you might hesitate or be concerned about pledging your mutual fund or stocks as collateral. But in fact, you can pledge them for a loan from banks and NBFCs. Everything starts with an application. Let’s introduce you to some of the major benefits you can get with housing loans against mutual funds.

Lower Interest Rate: Taking a housing loan against mutual funds is definitely an ideal option for you if you want to avail yourself of debt without compromising on the interest rate and additional facilities. This can be helpful as the low-interest rate will save your pocket while a quicker repayment mode will keep your mind at peace with no pressure of meeting overdue payments.

Interest only on the used loan amount: When you use mutual funds to get a housing loan, only the amount that is actually used for purchasing or construction of your house will attract interest. The interest is calculated on the amount that exceeds the current balance and not the entire pledged amount.

No Loss of Assets: Your assets (mutual funds) will be secured as collateral with the lender. So basically you will get a loan for your home without even liquidizing or losing your assets. Although you won’t be able to use your assets while they will be under the authority of the lender.

Flexible Repayment: As per your convenience, the lenders offer easy installments for both lien and flexi loans. Since loan against mutual funds has flexible repayment options, you can repay your loan amount in small installments as well

FAQs

With a Housing Loan Against Mutual Funds, you can avail of a home loan while providing your Mutual Funds to the lender as collateral.

Yes, you can get a housing loan against a Debt Fund as well.

In any case, if you can’t repay your EMIs on time, the bank will sell your acquired mutual funds.

Yes, people with no credit history can also apply for a loan against mutual funds.

Yes, you can easily apply for a housing loan against mutual funds, through internet banking.

Leave a Reply

Your email address will not be published. Required fields are marked *