Is it possible to use mutual funds to repay a home loan?

Yes, you can use mutual fund investments to repay your home loan either by redeeming the funds or by availing a loan against mutual funds, which can provide immediate liquidity without selling your assets.

What is a loan against mutual funds, and how can it help with home loan repayment?

A loan against mutual funds allows you to borrow money by pledging your mutual fund units as collateral. This way, you can access funds to pay off your home loan without liquidating your investments.

Are there any tax implications if I redeem mutual funds for home loan repayment?

Yes, redeeming mutual funds may result in capital gains tax, depending on the holding period and type of fund (equity or debt). It’s essential to consider this tax implication before deciding.

What is the difference between redeeming mutual funds and taking a loan against them?

Redeeming mutual funds means selling your units and incurring any potential tax on gains. Taking a loan allows you to retain ownership of the funds and potentially benefit from future returns while addressing immediate cash flow needs.

How much can I borrow through a loan against mutual funds to repay my home loan?

The amount you can borrow depends on the type of mutual fund and the lender’s terms. Typically, lenders offer a loan of 50-70% of the current value of the pledged mutual fund units.

Is it advisable to use mutual funds to pay off a home loan?

This depends on your financial goals and the performance of your mutual funds. If your mutual funds are yielding high returns, it may be more advantageous to keep them invested and consider alternative repayment options.

How does Liquify help with quick funds against mutual funds for home loan repayment?

Liquify offers a streamlined process to access quick funds against mutual funds, allowing you to unlock the value of your investments without selling them. This helps you manage home loan repayments efficiently while maintaining your investment portfolio.