Don’t Redeem!!

Mutual Funds can be your emergency fund—without touching your principal.

Most investors rush to redeem MFs when a crisis hits. But there's a smarter option: Loan Against Mutual Funds (LAMF).

What is LAMF?

It allows you to borrow money by pledging your mutual fund units (equity/debt). Most banks and NBFCs offer this, with:

• Instant online approval

• Low interest rates (10–12%)

• No pre-closure penalties

Why Not Redeem?

• You lose compounding benefits

• Early redemption might trigger taxes

• You may miss out on market recovery

Case in Point

Raj needed ₹5 lakhs for his daughter’s admission. Instead of redeeming his equity MFs (locked in at 20% unrealized gains), he took a loan against them. Two years later, he repaid the loan and his MFs had grown another 15%.

Who Should Use LAMF?

• Investors with short-term liquidity crunch

• Those with long-term goals intact

• Tax-conscious investors

Redeem only when absolutely necessary. Otherwise, make your mutual funds work without selling them.