Home >Mutual Funds >Tata Capital launches digital 'Loan Against Mutual Funds’. Know how to avail it

Tata Capital Ltd, the flagship financial services company of the Tata Group on Tuesday announced the launch of ‘Loan Against Mutual Funds’, an industry-first end-to-end digital offering. Customers can avail ofloans ranging from 5 lakh to 2 crore.

How to avail

Tata Capital’s digital loan offering is provided against a wide range of equity and debt schemes across mutual funds. Customers can avail of the loan amount by marking a lien on the mutual fund units which are managed by various asset management companies. Loan Against Mutual Funds is a personalized product to meet the diverse fund requirements of the customer. The loan amount is customized based on the value of the units in the mutual fund folio and tenure.

As reported by AMFI, the Indian Mutual Fund Industry’s AUM has grown from 15.18 trillion as on 31 July, 2016, to 35.32 trillion 31 July, 2021. Given the exponential growth in this investment category, Loan Against Mutual Funds is best suited for customers to meet their personal or business funding requirements. The customer also continues to hold the mutual funds portfolio and can enjoy its benefits as well. He/she does not require to redeem the portfolio and pays interest only on the applied loan amount, as per the release issued by Tata Capital.

Key benefits

> End-to-end online journey, from onboarding to disbursement

> Loan can be applied as an overdraft facility or as a term loan

> Auto-renewal facility available for tenure exceeding one year (subject to review of the mutual fund portfolio)

> Onboarding journey is completed within minutes

> Online lien marking of Mutual Funds via CAMS API

> Service portal comprises features for disbursement, drawdown, additional pledging and de-pledging.

> Online execution of documents

> Customer enjoys the benefits of growth and dividend received from the MF portfolio

Abonty Banerjee, chief digital officer, Tata Capital said, “Mutual funds as an investment category has shown tremendous growth over the last decade and continues to gain momentum. Further, this product gives customers an opportunity to easily meet their fund needs in a seamless manner, even while retaining control over their portfolio. This is in line with our strategy of constantly offering innovative products which offer customer convenience."

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