In today’s fast-paced world, access to quick credit can be a game-changer. A new fintech startup, Quicklend, is making waves by offering loans against mutual funds (LAMF) within just 30 minutes. Unlike traditional banks, which often involve tedious paperwork and long approval times, Quicklend provides an easy, digital-first solution for investors needing urgent liquidity. Let’s explore how this works, the interest rates, the risks involved, and whether this option is suitable for you.
What Are Mutual Funds?
Mutual funds are investment vehicles that pool money from multiple investors to invest in stocks, bonds, or other assets. They offer benefits such as professional fund management, diversification, and liquidity. While mutual funds are typically long-term investments, they can also be leveraged for short-term financial needs through loans. Investors invest in Diversified porttolio of Mutual Funds to reap long term benefits.
Which Platform Provides Loans Against Mutual Funds in 30 Minutes?
Quicklend, a Bengaluru-based fintech startup founded in December 2023 by Raghuram Tirkutam, Arun Jadhav, and Abhishek Uppala, offers a seamless platform where investors can pledge their mutual funds as collateral and get a loan within 30 minutes.
The startup was launched with the goal of making secured lending more accessible and efficient. Given the massive growth of the mutual fund industry in India—₹66.93 lakh crore AUM as of December 2024 (AMFI data)—this presents a huge opportunity for investors looking for instant liquidity without selling their investments.
How Does Loan Against Mutual Funds Work?
Quicklend functions as a lending service provider, facilitating loans from partnered financial institutions like Bajaj Finserv and Piramal Finance. Here’s how the process works:
- Pledge Mutual Fund Units: Investors provide details of their mutual fund holdings via Quicklend’s digital platform.
- Loan-to-Value (LTV) Assessment: Quicklend assesses the value of mutual fund units and offers a loan up to 50% of the fund’s value.
- Loan Approval & Disbursal: Once approved, the loan is disbursed directly into the investor’s bank account within 30 minutes.
- Repayment & Interest: The investor repays the loan over time, while still earning returns on the pledged mutual funds.
Loan Amount & Interest Rates
- Loan amounts range from ₹25,000 to ₹3 lakh for retail users, with some cases extending up to ₹1 crore for businesses.
- Interest rates range between 9% to 12% per annum, depending on the financial institution and the borrower’s profile.
- No additional charges for customers; Quicklend earns a commission from financial institutions per successful loan disbursal.
Benefits of Loans Against Mutual Funds
✅ Quick Processing: No lengthy approvals—funds are credited in just 30 minutes.
✅ No Need to Sell Investments: Investors retain their holdings while accessing liquidity.
✅ Lower Interest Rates: Secured loans have lower interest rates compared to personal loans or credit cards.
✅ Minimal Paperwork: The entire process is digital, making it hassle-free.
Risks & Challenges of Loans Against Mutual Funds
❌ Market Risk: If mutual fund NAVs drop significantly, the lender may ask for additional collateral or partial repayment.
❌ Liquidation Risk: Failure to repay the loan on time could result in forced selling of pledged mutual funds.
❌ Limited Loan Amount: Unlike personal loans, the loan amount is restricted to 50% of the fund’s value, which may not be enough for larger financial needs.
❌ Regulatory Challenges: Fintech startups like Quicklend operate under RBI guidelines, and changes in lending regulations could impact their business model.
Are there any other platforms providing quicker loans against mutual funds?
Yes, several financial institutions and fintech platforms in India offer quick loans against mutual funds. Here are some notable options:
- ICICI Bank: ICICI Bank provides instant loans against mutual funds with interest rates starting at 11.50% per annum, offering loan amounts up to ₹1 crore.
- Abhiloans: Abhiloans offers loans against mutual funds with a loan-to-value (LTV) ratio of up to 65% for equity mutual funds and 75% for debt mutual funds. The loan amount ranges from ₹15,000 to ₹1 crore, depending on the lender’s credit limit.
- Smallcase: In partnership with Bajaj Finance Limited, smallcase investments offers digital loans against mutual fund units with interest rates starting at 10.75% per annum. The platform emphasizes a quick and seamless online application process.
- Volt Money: Volt Money provides instant loans against mutual funds with interest rates ranging from 9% to 11% per annum. The platform boasts a fully digital process that can be completed in approximately 5 minutes, with funds disbursed within 4 hours.
- INDmoney: INDmoney’s INsta Plus feature allows users to pledge their mutual funds and borrow funds at an interest rate of 10.5% per annum. The platform offers flexibility in repayment, with options to pay only the interest monthly and settle the principal at the end of the term.
- DhanLAP: DhanLAP enables users to obtain loans against mutual funds and shares with instant approval, processing, and disbursement. The platform allows users to leverage their investments to secure same-day loans.
- 50Fin: In collaboration with Bajaj Finserv Ltd., 50Fin offers loans against mutual funds through a digital process. Users can pledge their mutual fund units and continue to earn returns on their investments while accessing liquidity.
Should You Take a Loan Against Mutual Funds?
A loan against mutual funds is an excellent option if you need quick liquidity without selling your investments. However, it’s essential to consider market risks and repayment obligations before opting for such loans. If mismanaged, borrowing against mutual funds could impact your long-term financial goals.
For investors who are confident about their repayment ability and want a quick, low-cost loan, such 30-minute LAMF solution could be a smart choice.
Would you consider taking a loan against your mutual funds? Let me know in the comments! 🚀
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