What is the primary difference between a loan against mutual funds and a personal loan?

A loan against mutual funds uses your mutual fund investments as collateral, often offering lower interest rates. Personal loans, on the other hand, are typically unsecured and may have higher interest rates due to the lack of collateral.

Which loan option generally has a lower interest rate: a personal loan or a loan against mutual funds?

Loans against mutual funds typically come with lower interest rates compared to personal loans because they are secured by the value of your mutual fund investments.

Are there any restrictions on how I can use the funds from either type of loan?

Both personal loans and loans against mutual funds are generally flexible, allowing you to use the funds for various needs. However, it’s essential to verify terms with your lender, as some may have usage restrictions.

How much can I borrow with a loan against mutual funds compared to a personal loan?

The amount you can borrow through a loan against mutual funds depends on the value of your mutual fund holdings (usually around 50-70% of the fund’s value). Personal loan amounts are based on your income and credit profile rather than collateral.

Will taking a loan against mutual funds affect my credit score?

Loans against mutual funds are secured loans, and if repayments are made on time, they may not significantly impact your credit score. Late payments on either type of loan, however, could negatively affect your score.

Which loan type is faster to approve and disburse: loan against mutual funds or a personal loan?

Personal loans are often disbursed quickly due to minimal paperwork and no collateral requirement. Loans against mutual funds also have quick disbursement but might require additional steps for securing the loan against your mutual fund units.

Why should I consider Liquify for a loan against mutual funds?

Liquify offers a seamless digital process for loans against mutual funds with quick disbursement and competitive interest rates, allowing you to access funds conveniently while keeping your mutual fund investments intact.

Personal Loan vs Loan against Mutual Funds

Personal Loan vs Loan against Mutual Funds - Liquify

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