Loan Against Mutual Funds Calculator: Interest & Eligibility

Need cash but do not want to sell your investments? A loan against mutual funds lets you borrow against the units you already hold. Your money stays invested and keeps working, while you get liquidity for a short-term need. This loan against mutual funds calculator shows your eligible loan limit, your monthly interest or EMI, total interest and total repayment, along with a year-wise schedule.

Enter your portfolio value, the amount you need and an interest rate, then pick your fund type and repayment mode. The result appears instantly. Every calculation runs privately in your browser. There is no sign-up and no data leaves your device.

What Is a Loan Against Mutual Funds?

A loan against mutual funds, often called LAMF, is a secured loan where your fund units act as collateral. The lender places a lien on your units through the registrar (CAMS or KFintech), which you approve by OTP. You continue to own the units and still earn returns on them, but you cannot sell them until the lien is released.

Because the loan is secured, interest rates are much lower than a personal loan. It suits short-term needs like a medical bill, a business gap, or a large purchase, where selling long-term investments would be costly.

How This Loan Against Mutual Funds Calculator Works

You provide a few inputs and the tool does the rest.

• Mutual Fund Type: choose Equity or Debt. The calculator sets a typical loan-to-value automatically, which you can change.
• Portfolio Value: the current value of the units you plan to pledge.
• Loan Amount Required: how much you want to borrow. The tool checks this against your eligible limit.
• Interest Rate: the annual rate offered by your lender.
• Loan Period: the tenure in months, up to 120.
• Repayment Mode: Overdraft or EMI, explained below.

Under Advanced Options you can fine-tune the loan-to-value percentage and the processing fee to match your exact lender terms.

Eligible Loan Limit and Loan-to-Value (LTV)

Your eligible loan limit depends on two things: the value of your pledged units and the loan-to-value ratio your lender applies.

Eligible Limit = Portfolio Value × LTV

LTV is the share of your fund value a lender will advance. It is lower for equity funds because they are more volatile, and higher for debt funds. The Reserve Bank of India revised its rules for loans against securities in 2026, raising the ceilings, though each lender still sets its own limit within those caps.

The calculator uses 50% for equity and 80% for debt as sensible defaults, which reflect what many lenders offer today. Use the LTV field under Advanced Options to match your lender’s exact figure. Always confirm the applicable LTV before you apply.

There is also a system-wide borrowing cap. From July 2026, an individual can borrow up to ₹1 crore against securities across all banks combined, not per bank.

Overdraft vs EMI: Choose Your Repayment Mode

This calculator supports both repayment structures, and the difference is important.

Overdraft (Interest Only)

Most loans against mutual funds are offered as an overdraft. You get a credit limit, withdraw only what you need, and pay interest only on the amount used. There is no fixed EMI. You repay the principal whenever you have funds, often with no foreclosure charge.

• Lower monthly outgo, since you pay interest only.
• Flexible principal repayment.
• Best for uncertain or short-term needs.

For example, on a ₹5 lakh drawdown at 10.5%, your monthly interest is about ₹4,375. The principal stays payable whenever you choose.

EMI (Term Loan)

Some lenders offer a fixed term loan. You repay principal and interest together in equal monthly instalments, like a personal loan.

• Predictable, fixed EMI.
• Principal reduces steadily.
• Best when you want a clear end date.

The calculator switches the summary label and the year-wise schedule columns automatically based on the mode you pick, so the numbers always match your choice.

Loan Cost Breakdown and Schedule

After you calculate, the summary shows your eligible loan limit, monthly interest or EMI, total interest, processing fee and total repayment. A chart splits your loan amount against total interest so you can see the true cost.

Below that, the year-wise repayment schedule lists the yearly figures for your chosen mode, with a clean card layout on mobile. If your requested amount is above your eligible limit, the tool flags it and shows the cost for the maximum you can actually borrow.

Note that the processing fee is shown separately, since lenders usually deduct it at disbursal rather than adding it to your repayment. You can also share your plan as a link or image, and download the full schedule as a CSV file.

Interest Rates and Charges to Expect

• Interest rate: typically 9% to 13% a year for equity funds, and often slightly lower for debt funds. Banks may price lower than NBFCs, while NBFCs often disburse faster.
• Processing fee: usually 0.25% to 1% of the loan, sometimes a flat fee.
• Other charges: pledge, renewal, annual maintenance or top-up charges may apply. Compare the total cost, not just the headline rate.

Why Pledge Instead of Selling Your Funds

This is the biggest advantage and the reason many investors prefer a loan against mutual funds.

• No capital gains tax event. Selling equity units held over a year can trigger long-term capital gains tax on gains above ₹1.25 lakh. Pledging avoids this, because you do not sell.
• Your money stays invested. Units keep earning returns and compounding while pledged.
• Cheaper than a personal loan. Personal loans often cost 14% to 30%. A secured loan against funds is far lower.
• Quick and paperless. Many lenders disburse within minutes after lien marking.

Risks You Should Understand

A loan against mutual funds is useful, but not risk-free. Borrow responsibly.

• Margin top-up: if your fund value falls, the lender may ask you to add collateral or repay part of the loan.
• Forced redemption: on default, the lender can sell your pledged units, possibly at a low value.
• Lien restrictions: you cannot redeem, switch or run an SWP or STP on pledged units until the lien is released.
• Over-leverage: easy credit can tempt you to borrow against long-term savings for short-term spending.
• End-use rules: RBI restricts using these funds for speculative capital-market activity like buying shares or IPOs.

Which Funds Can You Pledge?

Most equity, debt and hybrid funds on the lender’s approved list are eligible. ELSS units and other funds still inside a lock-in cannot be pledged until the lock-in ends. Units already pledged with another lender cannot be double-pledged.

Who Should Use This Calculator?

• Investors needing short-term cash without breaking their portfolio.
• Anyone comparing a loan against funds with a personal loan.
• Borrowers deciding between overdraft and EMI repayment.
• Investors checking their eligible limit before applying.

Features of the PlanMyReturns LAMF Calculator

• Eligible loan limit based on your portfolio value and LTV.
• Separate equity and debt fund modes with adjustable LTV.
• Overdraft and EMI repayment options.
• Monthly cost, total interest, processing fee and total repayment.
• Year-wise repayment schedule on desktop and mobile.
• Eligibility alert when your request exceeds the limit.
• Shareable link, image summary and CSV download.
• Completely free, privacy-first and no login.

Frequently Asked Questions