Loan Against Mutual Funds / Securities
Liquidity against your holdings — without redeeming them
A loan against mutual funds or securities (LAMF / LAS) lets you borrow against what you already own instead of selling it. Loans are provided by RBI-registered NBFC lenders — Ladder is a referral partner only, not a lender.
Launching soon. Referrals for loans against mutual funds and securities are being set up and are not yet open. This page explains how the service will work — for where things stand today, see our contact details.
01 — The Structure
Your units stay invested. A lien is marked. A credit line opens.
You pledge mutual fund units or securities to the lender by marking a lien on them. You remain the owner and the holdings stay invested. The lender sanctions a limit against their value, and you pay interest only on what you actually draw.
The Mechanism
A lien, not a sale
Units are lien-marked in favour of the lender through the registrar (CAMS or KFintech) or your depository — usually a fully digital process. Ownership doesn't change, nothing is redeemed, and pledging does not trigger capital gains tax.
How Much
A percentage of current value
Lenders advance a percentage of the pledged value — the loan-to-value ratio. It is lower for equity holdings than for debt holdings and is capped by RBI norms. The lender decides the final limit under its own credit policy.
The Cost
Interest on what you use
Most facilities run like an overdraft: interest accrues only on the amount drawn, for the days it is drawn. Rates, processing fees and renewal charges are set by the lender and stated in its Key Fact Statement.
02 — The Risks, First
Borrowing against a market-linked asset cuts both ways.
A loan against securities is a useful tool for the right need. It is also a loan — secured on assets whose value moves every day.
Margin calls
If markets fall, the value of your pledged holdings falls with them. The lender can ask you to pledge more units or repay part of the loan at short notice to restore the agreed loan-to-value ratio.
Forced sale
If a margin call is not met in time, the lender has the right to redeem or sell the pledged holdings to recover its dues — typically at exactly the wrong moment in the market.
Interest works against you
The loan costs interest every day it is outstanding. If the borrowed money isn't solving a genuine short-term need, the arithmetic runs against you.
Pledged units are locked
You cannot redeem or switch lien-marked units until the lender releases the lien. Rebalancing and goal-based withdrawals are constrained while the loan is open.
Not every holding qualifies
Each lender maintains its own approved list of schemes and securities. ELSS units still in lock-in, some closed-ended schemes and thinly traded securities are commonly excluded.
Sanction is the lender's decision
Eligibility, limit, rate and tenure are decided solely by the lender under its credit policy. A referral from Ladder does not influence or assure sanction.
Ladder is a referral partner only — not a lender.
Loans are sanctioned, disbursed and serviced by RBI-registered NBFCs. Ladder Financial Services LLP does not lend, does not collect repayments, and does not handle loan money at any point. Your loan agreement is with the lender, and the lender's grievance process — with escalation under the RBI's Integrated Ombudsman Scheme where applicable — applies to the loan.
03 — Honest Qualification
A bridge for a short-term need — not a way to invest more.
The first question we ask is whether you need a loan at all. Sometimes redeeming part of the portfolio is simply the better answer.
It can make sense when
- The cash need is short-term — weeks or months, not years — with a clear source of repayment
- Selling would trigger exit loads or capital gains tax you would rather not crystallise
- You want long-term holdings to stay invested through a temporary gap
- The alternative is unsecured borrowing — a personal loan or credit-card debt — which typically costs more
It does not make sense when
- You are borrowing to invest more in the market — that is leverage on a volatile asset
- The funding need is long-term or open-ended, with no repayment plan
- The holdings are earmarked for a near-term goal — a margin call could force a sale before the goal date
- The portfolio is small or concentrated enough that a moderate fall would trigger a margin call
04 — What Happens Next
From a conversation to a released lien.
A conversation first
What you need the money for, for how long, and how you will repay it. If redeeming part of your portfolio is the better answer, we will say so.
Referral to a lender
With your consent, we introduce you to an RBI-registered NBFC lender from our empanelled partners. From this point you deal with the lender directly.
Eligibility and limit
The lender checks which of your holdings qualify and sanctions a limit under its own credit policy, with the rate and all charges set out in its Key Fact Statement.
Lien marking and disbursal
You authorise the lien digitally through the registrar or depository. The lender disburses to your bank account — Ladder never handles loan money.
Repayment and release
You repay the lender directly. Once dues are cleared the lien is released and your units are free again. The loan is kept in view during your portfolio reviews.
05 — Transparency
How we're paid — plainly stated.
LFS is a referral partner. We are not a lender, we are not party to your loan agreement, and we do not collect money from you or on the lender's behalf.
The lender's charges
Interest, processing fees, renewal and foreclosure charges are set by the lender and disclosed in its Key Fact Statement before you accept the loan. They vary by lender and by the holdings pledged.
LFS referral fee
Ladder Financial Services is paid a referral fee by the lender for the introduction. You pay LFS nothing, and the fee is disclosed to you before you proceed.
06 — Common Questions
Things people usually ask about LAMF and LAS.
Do I still earn returns on pledged units?
Does pledging trigger capital gains tax?
What happens if the market falls sharply?
Who is my loan agreement with?
Is borrowing better than redeeming?
How is LFS paid?
06 — Loan Against MF / Securities
Need liquidity without selling?
This service is launching soon. Reach us on the details below and we will tell you where things stand.
Phone / WhatsApp
+91 98194 44453Hyderabad
Royal One Apartments, 304
Road No. 8, Banjara Hills
Hyderabad – 500034
Mumbai
Office 12, Shri Paramanand Society
Road No. 5, Khar West
Mumbai – 400052