What does it mean to pledge mutual funds for a loan?

Pledging mutual funds means using your mutual fund units as collateral to secure a loan. The units remain in your ownership, but a lien is placed on them until the loan is fully repaid.

Can I earn returns on pledged mutual funds?

Yes. Even after pledging your mutual fund units, you continue to remain invested and may receive returns, dividends, and capital appreciation, subject to the performance of the underlying mutual fund.

How much loan can I get against mutual funds?

The loan amount depends on the type and value of your mutual fund holdings. Most lenders offer approximately 50% to 80% of the current market value of eligible mutual fund units, depending on the fund category.

How long does it take to get a loan against mutual funds?

With digital lending platforms, loan approval can often be completed within minutes, and funds may be disbursed within 24 hours after successful verification and pledge confirmation.

Can I sell my mutual funds after pledging them?

No. Once mutual fund units are pledged, they cannot be redeemed, sold, or switched until the outstanding loan amount is repaid and the lien on the units is removed.

What types of mutual funds are eligible for pledging?

Many lenders accept eligible equity, debt, hybrid, and multi-asset mutual funds. However, certain categories such as sectoral funds, some small-cap funds, new fund offers (NFOs), and international funds may not qualify.

Who is eligible to apply for a loan against mutual funds?

Generally, Indian residents aged 18 years or above with eligible mutual fund holdings and a valid PAN card can apply for a loan against mutual funds, subject to the lender's terms and conditions.

Does checking eligibility for a loan against mutual funds affect my CIBIL score?

No. Eligibility checks on platforms like Liquify do not impact your CIBIL score because they are conducted without a hard credit inquiry during the initial assessment stage.

How to Pledge Mutual Funds for a Loan: Beginner’s Guide

Home > Blogs > How to Pledge Mutual Funds for a Loan: Beginner’s Guide

Liquify | Thursday, June 11th, 2026, 3:03:10 PM

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