Q. Which mutual fund schemes are eligible to take loans?
A. Right now, all equity mutual funds offered by all mutual fund companies are eligible to take loans. An exception is the ELSS schemes which are not eligible to take a loan.
Q. Are there any eligibility requirements to get this loan?
A. No, there are no eligibility requirements to get this loan. You have to hold mutual fund schemes in your name to take a loan against it.
Q. Can I take a loan against the mutual fund units held in a corporate account?
A. No, you cannot take loans against mutual funds units held in a corporate or HUF account. Only mutual fund units held in individual accounts can take a loan.
Q. How much amount can I take as a loan?
A. You can take up to 50% of the value of your equity mutual fund schemes in your portfolio as loan. The value of your mutual fund scheme is calculated as the number of units multiplied by the NAV of the scheme. The total of all the value of all the equity mutual fund schemes will be considered as your portfolio value.
Q. Which bank should I have an account for taking this loan?
A. We accept accounts at all banks recognized by RBI. There are no restrictions for any bank in our platform.
Q. What is lien marking?
A. When you take a loan against your mutual fund units, we lien mark the mutual fund units, so that it cannot be redeemed until you pay back the loan. The lien marking is done digitally and in real-time.
Q. Can I lien mark any mutual fund units of my choice?
A. Yes, you can lien mark any equity mutual fund units of your choice in your mutual fund portfolio. We will show you an optimal allocation for lien marking depending on your portfolio and loan amount that you had asked for. You can change the schemes and units and have your own allocation for lien marking. We are completely flexible with it.
Q. What are the various charges associated with the loan?
A. There are few components to the charges of a loan. They are the interest rate, the one-time processing charge, the actual lien marking charges of registrars, and the other charges such as stamp duty, bank mandate charges, etc.
Q. What documents do I need to have to get a loan?
A. You do not need any physical documents to get this loan. You need your Aadhar number, PAN number, Bank account number and IFSC code of your bank account. You need to have access to the mobile number associated with your Aadhar and bank account.
Q. What is VCIP and why should I do it?
A. VCIP is video customer in-person verification. It is a RBI regulation and every customer has to be verified before offering the loan. It will take a few minutes to do it and will be done by a video call.
Q. How long does it take to get a loan?
A. Our platform offers a end-to-end digital process for taking your loan. Once the process is completed the loan will be disbursed to your bank account immediately.
Q. How can I repay the loan?
A. There are two options to repay the loan – EMI and Balloon repayment.
In the EMI repayment, you need to pay every month an amount which will be split in to interest and principal repayment. An EMI schedule will be shown to you during the loan process.
In the Balloon repayment process, you will pay the interest for the loan every month and you will pay the principal amount at the end of the loan period.
Q. How do I repay the loan monthly?
A. During your loan process an eMandate (NACH) is set up with your bank account to deduct the EMI/Balloon payment amount monthly to repay the loan. Automatically, depending on the date you choose, the amount will be deducted from your bank account to pay your EMI/Balloon payments. We will be sending a sms and email to you before deducting the monthly payments so that you can make sure that the amount is available in your bank account.
Q. Can I choose any date for my monthly loan repayment?
A. Yes, you can choose any date for your monthly repayment from 1 to 28.
Q. What is the tenure of the loan?
A. We are currently offering loan tenure of 6 months, 12 months and 18 months. You can choose any one of the tenures for your loan.
Q. What happens after I repay my loan amount?
A. All your mutual fund units will be unlien marked (lien unmarked) and made in to 'free' units.
Q. Are there any pre-payment charges or penalties?
A. There are no pre-payment charges or penalties. You can repay your loan at any time you want.
Q. What happens if I am not able to repay the loan?
A. If you are not able to repay the loan, you have the option to ask us to sell off the mutual fund units, repay the principal, interest and get back the remaining amount in your bank account.
Q. What happens when the value of my mutual fund units falls?
A. If the total value of your mutual fund units falls below 90% of the lien marked value, you will get a warning email and sms to replenish the amount. If the value falls below 80% you will get a final warning email and sms to replenish the amount. If the value falls below 75% of the lien marked value, we will sell the mutual fund units and take our principal and interest and transfer the remaining amount to your bank account.
Q. I am an NRI. Can I take a loan against my mutual fund units?
A. No, you cannot take a loan against your mutual fund units. Only resident Indians can avail this loan facility.
Q. Do you check my credit score in your process?
A. Yes, we check your credit score with a RBI recognized credit bureau. You will be getting a credit report too in your email. It is a RBI regulation that we need to do a credit check before offering you a loan.
Q. Can I give you a different bank account than the one specified in my mutual fund folios?
A. Yes, you can give us a different bank account. The bank account should be in your name. We will verify your bank account and credit the bank account with the loan amount. The eMandate (NACH) for repayments will also be created in the bank account that you gave us.