India's biggest lender SBI offers the facility of getting loans against mutual fund units. "In an emergency, leverage your mutual fund investment; opt for a loan against it," SBI said in a tweet, highlighting the scheme. "Did you know you can avail a personal loan against your mutual fund investment at attractive interest rates?" SBI added. Loan against mutual funds offers the bank's customers the facility to get money for short-term requirements without having to liquiditate your mutual fund investments. The customers pledges the mutual fund units as a security to lenders. During the tenure of loan, the customer cannot redeem the units.
Details of SBI's Loan Against Mutual Funds Scheme
Loan Amount - Minimum amount - Rs 25,000; Maximum loan - Rs 20 lakh in case of equity/hybrid/ ETF (exchange traded) mutual funds and Rs 5 crore in case of debt mutual funds.
Margin - For equity/hybrid/ ETF (exchange traded) mutual funds, an SBI customer can get up to 50 per cent of value of funds as loan. In case of debt mutual funds, the limit is 85 per cent.
Approved schemes: SBI on its website has given the list of mutual funds eligible for loan against mutual funds scheme.
Eligible Branches: SBI on its website has also given the list of branches that can offer this scheme.
SBI processing fees : 0.75% of the loan amount + applicable tax ( Under GST, banking and financial services have been kept under the 18 per cent slab)
Review/Renewal Charges (YEARLY): Rs 1000 + applicable taxes
Interest Rates: According to SBI's website, it is currently charging an effective interest rate of 11.15 per cent with a reset period of one year.