Tata Capital has announced the launch of a Loan Against Mutual Fund (LAMF) allowing clients to benefit from quick and hassle-free loans ranging from Rs 5 lakh to Rs 2 crore. This is a one-of-a-kind offering in the mutual fund industry. The Tata Group digital loan offering financial services company is provided against a variety of debt and equity programs through mutual funds (MF).
For this, clients can avail the loan amount by scoring a lien on mutual fund units that are managed by multiple asset management companies, according to a recent statement shared by Tata Capital. The mutual fund loan is backed by analytics and is a personalized product tailored to the various fund requirements of clients.
According to AMFI funds in India).
The loan amount in the digital offering is personalized based on the value of the mutual fund folio units as well as the term, according to the release.
Some key advantages of digital lending versus mutual funds are as follows:
- It provides an end-to-end online journey for clients from onboarding to disbursement
- The loan can be applied as an overdraft facility or as a term loan
- As part of the offer, the automatic renewal facility is available for a term greater than one year – which is subject to review of the mutual fund portfolio.
- Boarding trip is completed in minutes
- The service portal includes direct debit, disbursement, additional collateral and disengagement functionalities. It also provides easy online document execution.