What is the difference between margin and collateral?

Margin refers to the funds or securities deposited with a broker as a guarantee for trading. Collateral is the asset pledged to secure a loan.

Is it good to take a loan against mutual funds?

Yes, it is a cost-effective way to access liquidity without selling your mutual fund investments, allowing you to continue earning returns.

Should I opt for a loan against mutual funds or margin funding if I am looking for liquidity?

Choose Loan Against Mutual Funds for general liquidity needs and Margin Funding for trading in stock markets.

How do both loan options impact my investment portfolio?

Margin Funding: Increases exposure to market risks; a downturn can lead to losses. Loan Against Mutual Funds: NAV fluctuations may require margin top-ups but don't directly impact portfolio returns.

Home > Blogs > Difference Between Loan Against Mutual Funds and Margin Funding

Liquify | Wednesday, December 4th, 2024, 11:26:53 AM

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