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HDFC Loan against Mutual Fund

Highlights

  • Is HDFC Loan against Mutual Fund the right option for you?
  • You should read the loan offer in detail to figure out the same!

Emergencies can strike you anytime, and at that time, even lenders could ask for something in exchange for the loan they give it to you. One such thing is a mutual fund against which you can get a loan to meet your imminent needs. Although many lenders provide a loan against mutual funds, it’s the offer of HDFC Bank that makes many go for it. Not only does the bank offer higher loan quantum against mutual funds, but it also grants the loan against a wide range of mutual fund securities. Doesn’t matter if you have mutual funds units of fund houses other than HDFC Asset Management Private Limited, the loan can be approved if your mutual fund scheme comes under the list of its approved securities. You can check the list of such securities on the HDFC Bank website. So what are we waiting for? Let’s read and apply!

Table of Contents

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HDFC Loan Against Mutual Fund – Interest Rates, Loan Amount & Other Details

Loan AspectsDetails
Interest RateDepends on the movement of Net Asset Value (NAV)
Loan AmountUpto 50% of the NAV, subject to a maximum limit of INR 10 Lakh (Equity Funds)

Upto 80% of the NAV, subject to a maximum of INR 1 Crore (Debt Funds/Fixed Maturity Plans (FMPs)
Repayment TenureThe bank will decide the tenure at its sole discretion
Processing FeeUpto INR 3,500
Prepayment ChargesNIL-1,000

Note – An additional Goods and Services Tax at 18% will be levied.

How Will HDFC Bank Go About Extending a Loan against Mutual Funds?

Firstly, HDFC will grant the loan on an overdraft basis and not like a normal term loan. A separate current account will be opened wherein you will have your overdraft limit sanctioned. The interest will be charged only on the amount you withdraw and not the entire limit. The servicing of interest can be done by way of credits to the account. Most probably, overdraft limits will be sanctioned for a year initially. The bank will check the repayment pattern and decide about extending the facility.

How Does HDFC Bank Set the Processing Fee on a Loan against Mutual Funds?

Loans can be processed online as well as offline. When processed online, the processing fee amounts to INR 1,499. If you get it processed via the bank branch, the fee will rise to INR 3,500. The processing fee can be INR 1,499 plus applicable GST for the enhancement of limits when done digitally. In the case of non-digital enhancement, the processing fee will account for upto 0.50% of the sanctioned credit limit. The minimum fee amounts to INR 500.

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Prepayment Charges on Loan against Mutual Funds

There won’t be any prepayment charges if you do it from your own sources. You’ll be levied upto INR 1,000 if you do prepayment via a balance transfer to another lender.

Who is Eligible to Apply for HDFC Loan against Mutual Funds?

Resident Indians, non-resident Indians (NRIs) and the owner of a sole proprietor firm, partnership firm, public or private limited companies can apply for the loan.

Necessities for a Digital Loan against Mutual Fund

  • One must have an HDFC Bank Savings Account wherein the mode of operation should be single
  • Applicants must have their net banking credentials such as the User ID and Password
  • You must have a mutual fund holding with CAMS as transfer agent and Single

Documents Required

Submit the following documents to apply for HDFC loan against mutual fund units.

  • Identity Proof – PAN Card/Voter ID/Driving License/Passport/Aadhaar Card
  • Residence Proof – Voter ID/Driving License/Passport/Aadhaar Card/Electricity Bill/Telephone Bill
  • Income Proof – Salary slips for the last 3 months & bank statements for the last 6 months showing the credit of salary
  • Income Tax Return, audited balance sheet and profit & loss account for the last 2 years (Self-employed)

How to Apply for HDFC Loan against Mutual Fund Online?

The online process is hassle-free as it involves a few steps that are discussed below.

  • Visit the official website of HDFC Bank
  • Go to ‘Borrow’ icon
  • Navigate to Loan Against Assets and then on to Digital Loan Against Mutual Funds
  • A page will open, and on its right side, you can see the ‘Apply Now’ button
  • If you already hold a savings account with HDFC Bank, click on ‘HDFC Bank SB A/C Customer’. You will need to enter your customer ID and registered mobile number and proceed
  • In case you have a savings account of banks other than HDFC or are a non-individual, you will need to click on ‘Non-HDFC Bank/Non-individual customer. After that, a page will open and mention your name and other details
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Mention the details correctly before submitting the application. The bank will check the details carefully before giving in-principle approval to the loan transaction. After that, the bank will send executives to collect documents. Now all such details that you’ve filled online will be checked once more for final validation.

How to Apply for the Loan at HDFC Bank Branch?

You can visit any of the HDFC Bank branches with the requisite set of documents to apply for the loan. Ask for the application form, fill it and submit the same along with the necessary documents. The bank will check the details and okay the deal once satisfied with the verification process.

How to Contact HDFC Bank Customer Care on a Loan Against Mutual Fund?

Call the 24×7 toll-free customer care number – 180030106767 or 18004197676- of HDFC Bank to raise your queries regarding loan against the mutual fund and get all sorted.

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