Is redeeming mutual funds really free?

No. Redeeming mutual funds may result in capital gains tax, exit load (where applicable), and the permanent loss of future compounding on the redeemed units. The actual cost depends on your investment history and applicable tax rules.

Can I continue my SIPs after taking a Loan Against Mutual Funds?

Yes. Your SIP investments generally continue as normal after taking a Loan Against Mutual Funds. Only the pledged units remain under lien, while new SIP purchases continue to be credited to your mutual fund folio.

What if I need the money for more than a year?

For longer borrowing periods, compare the total loan interest with the tax implications and long-term investment impact of redeeming your mutual funds. Depending on your situation, redemption or another financing option may be more suitable.

Is a Loan Against Mutual Funds a reversible decision?

Yes. Once the outstanding loan is fully repaid, the lender removes the lien from the pledged mutual fund units, allowing you to regain full control of your investments without having sold them.

How quickly can I receive funds through a Loan Against Mutual Funds?

Many digital Loan Against Mutual Fund platforms can process eligible applications and disburse funds within 24 hours, while mutual fund redemption timelines vary depending on the scheme and fund house.

Mutual Funds vs Redemption Loan: Which Costs Less?

Home > Blogs > Mutual Funds vs Redemption Loan: Which Costs Less?

Liquify | Wednesday, July 22nd, 2026, 3:56:35 PM

FAQs

Categories

Subscribe to our newsletter

Media Coverage

Related Blogs