FAQs: Loans Towards Mutual Funds on Tickertape

Final Up to date on Dec 20, 2024 by Ayushi Gangwar

Welcome to a complete FAQs information for Mortgage Towards Mutual Funds on Tickertape. As Mortgage Towards Mutual Funds is our new providing, we perceive you could have varied questions – from its eligibility to its potential use instances. Relaxation assured, we’re right here to give you the solutions you’re in search of!Get your mortgage queries resolved shortly.

Getting Began with Loans Towards Mutual Funds

1. What’s a Mortgage Towards Mutual Funds? 

• Mortgage Towards Mutual Funds is a sort of mortgage the place you’ll be able to borrow cash by utilizing your mutual fund investments as collateral.

2. How is it totally different from different loans?

• Not like some loans that may require property or a gradual revenue or a credit score rating as safety, a mortgage towards mutual funds makes use of your investments as collateral. Moreover, you solely pay month-to-month curiosity on the borrowed quantity, and you may select when to repay the principal. 

3. How a lot mortgage can I take towards my mutual fund investments? 

• The mortgage quantity is dependent upon the worth of the mutual funds you’ll preserve as collateral. You may avail a mortgage towards mutual funds from Rs.25,000 to Rs.5 crore.

4. How lengthy can I take the mortgage for? 

• The default tenure of the mortgage is 36 months.  

5. What is going to my month-to-month funds appear to be? 

• On a month-to-month foundation, you solely pay curiosity on the fee of 10.75% p.a. on the excellent mortgage quantity. As an example, in case you have an excellent mortgage of Rs. 1 lakh, your month-to-month fee can be (1 lakh) x (10.75/12)/100) = Rs. 895.

6. Can this mortgage be used as a credit score line?

• Completely! Mortgage towards mutual funds can be utilized as a credit score line i.e. you’ll be able to borrow and repay from a predetermined credit score line a number of occasions with out re-applying for a brand new mortgage every time you want money.

7. How lengthy will the appliance course of and disbursement take?

• In case you meet the mortgage eligibility standards and have adequate mutual fund holdings to avail of a mortgage, all the course of from utility to disbursement must be accomplished in 2 working hours.

8. How are my mutual funds impacted?

• After you avail a mortgage, your mutual funds will probably be pledged as collateral to the lender. You may proceed to take a position and earn returns/dividends, however you received’t be capable to promote/redeem your mutual funds.

9. Does checking my credit score restrict have an effect on my credit score rating?

• Your credit score rating isn’t impacted in the event you merely calculate your credit score restrict earlier than availing of a mortgage towards mutual funds on smallcase. For the reason that mortgage relies in your mutual fund investments, no third occasion is concerned in reviewing your credit standing.

10. What’s the technique of taking LAMF?

• Login on the Tickertape app
• Join your Mutual Funds holding on the Portfolio tab
• Go to the Extra tab, click on on Mortgage Towards Mutual Funds
• Test your MF credit score restrict
• If logged in on smallcase, pledge the holdings relying on the mortgage quantity
• Signal the mortgage settlement
• Get money in your checking account inside 2 working hours

11. How can I repay the mortgage? 

• Go to the mortgage servicing dashboard click on on the ‘Repay money’ button, and enter the quantity you need to repay. Keep in mind, you can also make the repayments at any time earlier than the top of your mortgage tenure.

12. How can I shut the mortgage?

• You may shut your mortgage any time you need with none foreclosures or hidden prices. Head over to the assistance part of your mortgage dashboard or attain out to our assist workforce to request mortgage closure.

13. Who is definitely giving the mortgage? 

• At present, Bajaj Finance Restricted is providing the mortgage on the Tickertape and smallcase platform.

14. Is my information safe with Tickertape?

• Sure, your information is totally safe. To be taught extra about our privateness coverage, click on right here.

15. Are my smallcase or different investments eligible for a mortgage? 

• No, at the moment solely your non-demat mutual funds are eligible to avail of a mortgage from Tickertape’s collaboration with the smallcase app or web site.

16. What are the minimal and most required age for availing a mortgage towards a mutual fund?

• You ought to be between 18 years to 70 years of age.

17. Can I avail mortgage towards mutual funds held in a joint account?

• Sure, you’ll be able to avail of a mortgage towards mutual funds that are held by joint holders. Nonetheless, as part of the mortgage utility journey, a co-borrower kind must be signed bodily, and the identical must be despatched to the lender’s workplace for record-keeping functions. We’re working with a lender for a digital course of in such a situation.

Credit score Restrict Calculation

1. Which mutual funds are eligible for a mortgage?

• Solely mutual funds held in non-demat kind, i.e. solely these funds held within the Assertion of Accounts (SoA) or bodily kind can be utilized to take a mortgage. Furthermore, your mutual funds have to belong to the checklist of eligible mutual funds prescribed by the lender.

2. How is the credit score restrict calculated?

• The credit score restrict is calculated by taking a share of the present market worth of the mutual funds you want to pledge. This share is 45% for fairness MFs and 75% for debt MFs. 

3. What info is required to calculate credit score rating? Will smallcase share my information?

• To calculate your credit score rating, we’ll want your PAN, cellphone quantity, and e mail tackle linked to your mutual fund holdings. Relaxation assured – smallcase doesn’t share consumer information with any third occasion so your information is totally safe.

4. Will checking the credit score restrict influence my CIBIL rating? Is it a tough examine?

• Checking your credit score restrict doesn’t have any influence in your CIBIL rating, nonetheless, it’s a obligatory step so as to decide your mortgage eligibility. 

5. Why are mutual funds held in demat kind not eligible?

• All mutual funds corporations in India work with both CAMS or KFin as their RTA (Registrar and Switch Brokers). The RTAs have the flexibility to mark lien towards mutual funds held in non-demat kind solely. But when your mutual funds are in a demat kind, one other set of organisations known as depositories (CDSL & NSDL) have to be concerned to position the lien. We’re engaged on integrating these depositories quickly to offer loans towards demat mutual funds. 

6. Why are a few of my funds not eligible for a mortgage?

• A few of your mutual funds might not be eligible for a mortgage in the event that they: are held in Demat kind, are tax-saver ELSS funds underneath a lock-in of three years, are already pledged, or aren’t a part of the lender’s permitted checklist of eligible funds.

7. I’ve mutual funds but my eligible restrict is being proven 0. Why?

• This might occur if: the entire worth of mutual funds is low, MFs are held in demat kind or as tax saver ELSS funds underneath a lock-in of three years, MFs are already pledged, or MFs aren’t a part of the lender’s permitted checklist of eligible funds.

Utility Course of

1. What paperwork will probably be wanted to use for the mortgage?

• Making use of for a mortgage towards mutual funds is a totally digital and paperless course of. You’ll want solely your PAN (in the event you’ve by no means invested on the smallcase platform) and the cellphone quantity/e mail tackle linked to your mutual funds.

2. What are the steps of making use of?

• If logged in on smallcase, pledge the holdings relying on the mortgage quantity
• Add a checking account for receiving funds and arrange a mandate for month-to-month curiosity auto-debit
• Pledge your mutual funds
• Signal on-line mortgage settlement.

3. What occurs if I drop off the appliance in between?

• In case you drop off, you’ll be able to resume your utility from that time at any time. 

4. What are the phrases and circumstances of the appliance?

• Do not forget that your mutual funds will probably be pledged after availing of a mortgage, so you’ll be able to’t promote/redeem such pledged mutual funds. The month-to-month curiosity on the excellent mortgage quantity will probably be auto-debited from the checking account you present. Late fee curiosity and bounce prices are relevant in case of delay or failure of month-to-month curiosity funds.

5. What are some issues to verify of whereas making use of?

• For correct mortgage quantity calculation, guarantee that you’re offering all e mail addresses or cellular numbers linked to your mutual funds, in case of a number of e mail IDs/ numbers.

6. What are the costs/processing charges?

Including Mutual Fund Holdings to Test Mortgage Eligibility 

1. Why are my holdings being reimported?

• Your mutual fund holdings are being reimported to calculate the precise mortgage you’ll be eligible for in the event you determine to pledge them.

2. Which e mail tackle and cellphone quantity ought to I take advantage of to fetch holdings?

• To fetch mutual fund holdings serviced by CAMS, use the e-mail tackle registered together with your funding within the folio. For mutual funds serviced by KFin, enter the registered cellphone quantity. To examine the e-mail & cellphone numbers related together with your mutual fund investments, view your Consolidated Account Assertion right here.

 Mortgage Quantity Affirmation

1. Why is my calculated credit score restrict totally different from earlier?

• The mortgage quantity you may be eligible for could also be decrease than your earlier credit score restrict in case your mutual funds are:
  • Blacklisted by the lender/AMC
  • At present pledged
  • In demat account
  • ELSS funds underneath a 3-year lock-in

2. Can I determine which mutual funds to pledge?

• Sure, you’ll get an inventory of mutual funds that are eligible for a mortgage and you may choose those you need to pledge from this checklist. 

3. The models of a few of my mutual funds are lower than my precise holdings. Why?

• This could occur when a few of your MF models are locked from promoting for a sure time frame. For instance, tax-saving funds have a lock-in interval of three years. Such locked-in models can’t be used as collateral.

Linking Financial institution Account

1. Why do I’ve to hyperlink a checking account?

• Your linked checking account is used to obtain permitted loans and make hassle-free month-to-month curiosity funds via auto-debit and versatile repayments.

2. Why is e-mandate required?

• E-mandate is required for the auto-collection of curiosity on a month-to-month foundation. This helps in incurring any penalties as a consequence of late month-to-month curiosity funds. 

3. I get an invalid IFSC error. What ought to I do?

• Affirm that you’re getting into the proper IFSC code. If that also doesn’t work, please contact assist, we’ll attempt to resolve your concern as quickly as potential.

4. A white popup retains loading whereas establishing e-mandate?

• You must allow third-party cookies to arrange the e-mandate. Go to the browser settings, allow third-party cookies, and retry the method. As soon as the mandate setup movement is full, you could disable it.

5. I’ve arrange a mandate however don’t need to take a mortgage. What to do?

• If in case you have arrange a mandate however haven’t pledged mutual funds but, you’ll be able to merely shut the method and cancel the e-mandate out of your financial institution’s internet banking portal. Your partial mortgage utility is not going to be submitted to the lender.

Pledging Mutual Funds

1. What occurs once I pledge mutual funds?

• The mutual funds are lien marked within the favour of the lender i.e. that they’re saved as collateral with the lender.

2. Can I make investments extra/exit my mutual funds if pledged?

• As soon as the mutual funds are pledged, you can’t exit or promote such holdings till you shut the mortgage however you’ll be able to proceed your common investments.

3. When will my funds be unpledged?

• When you repay any excellent dues and shut the mortgage, your mutual funds will probably be unpledged.

4. Does paying again the mortgage partially unpledge some mutual funds?

• Partial unpledging of mutual funds is at the moment not potential. You’ll must repay all dues and shut the loans to unpledge all of the mutual funds in a single go. We plan to offer partial unpledging of mutual funds quickly. 

5. What are the tax implications of pledging?

• There will probably be no modifications with respect to tax concerns for the pledged mutual funds. There can be a change of period for calculating capital positive aspects tax provided that the mutual funds are unpledged and bought by the consumer, or if the mutual funds are confiscated by the lender.

6. My mutual funds received pledged however I don’t need to take a mortgage anymore.

• In case you haven’t e-signed the mortgage settlement after pledging mutual funds, you’ll be able to attain out to our devoted buyer assist workforce to unpledge your investments. Nonetheless, remember the fact that a minimal lien elimination cost of Rs. 500 will probably be availed for a similar.

Signing Settlement 

1. The display screen is caught on the “Producing your Settlement” display screen. What ought to I do?

• If the display screen is caught for longer than a few minutes, please contact the assist workforce and we’ll help you as quickly as potential.

2. How do I signal the settlement?

• On the lender’s settlement display screen, scroll to the underside of the web page and confirm the OTP to signal the settlement.

Mortgage Disbursal

1. How lengthy does it take for the quantity to get disbursed?

• After the appliance course of is accomplished, the mortgage quantity will probably be disbursed to your checking account in a few hours. 

2. What occurs publish the mortgage utility is submitted?

• When you submit your mortgage utility, the lender will confirm the small print. If every thing is so as, your utility will probably be permitted, and also you’ll obtain the funds in 2 working hours.

3. It’s been greater than the talked about time and I haven’t acquired my mortgage but. What to do?

• In case your mortgage utility is taking too lengthy to course of, please contact our assist workforce and we’ll resolve your concern as quickly as potential.

Managing Your Mortgage

1. The place can I handle my mortgage as soon as lively?

• You may go to the ‘Extra’ tab on the smallcase app to view the ‘Mortgage Dashboard’ and handle your repayments, withdrawals, and many others. in a single place.

2. How are my month-to-month dues deducted?

• Month-to-month curiosity funds will probably be auto-debited from the checking account on which you had arrange the e-mandate.

3. How can I pay again the mortgage absolutely/partially?

• You’ve the flexibleness to repay the mortgage at any time. Go to the ‘Extra’ tab on the smallcase app to view the Mortgage Dashboard and faucet on the ‘Repay Money’ button to pay again the mortgage. Select the quantity you need to repay and also you’re accomplished! 

4. How does withdrawal work?

• After you’ve repaid all the or a part of your principal, your credit score line is restored and you may withdraw money, ranging from a minimal Rs. 1,000 as much as the entire quantity of principal you’ve repaid i.e. you may get money with out making use of for a brand new mortgage. Word that as you withdraw, there will probably be a month-to-month curiosity on the entire withdrawn quantity. 

5. What occurs if I fail to pay my month-to-month instalments?

• In case you miss an curiosity fee, you must pay a bounce cost of Rs. 1200. A late curiosity fee of two% monthly will probably be charged on the due curiosity quantity from the due date till the date of the following fee. 

6. What occurs if the worth of my mutual funds instantly drops?

• The quantity that you’ve withdrawn or the excellent mortgage quantity can’t be higher than 45% of the pledged fairness MFs and 85% of the pledged debt MFs. Let’s say you’ve pledged fairness funds price Rs 1,000. So, you’ll be able to borrow as much as Rs 450 towards your fairness funds (45% of Rs 1000). Now, if the worth of the fairness MFs drops to Rs. 900, you’re solely eligible for 45% of this quantity as a mortgage which is Rs. 405. So, in case your excellent mortgage quantity is Rs. 450, you’ll have to repay Rs. 45 to carry your mortgage again throughout the allowed ranges.

7. What are the instances the place my mutual funds may be liquidated?

• If the worth of your pledged mutual funds falls and your excellent mortgage quantity turns into higher than the loan-to-value of the mutual funds, you must repay a sure excellent quantity such that your loan-to-value comes again inside allowed limits.
• In case you’re not in a position to pay this quantity in 7 days, the lender could get better this quantity by liquidating your pledged MFs after notifying you. 
• Along with this, your mutual funds could also be liquidated if the entire excellent quantity isn’t paid by the top of the 3-year mortgage tenure.

8. How can I shut my mortgage?

• You may request for mortgage closure from the assistance part of your ‘Mortgage Dashboard’ or by reaching out to the assist workforce. If there is no such thing as a excellent quantity, your pledged mutual funds will probably be launched and your mortgage account will probably be closed as quickly as potential with none foreclosures or hidden prices. 

We hope this information was useful in answering your queries relating to Loans Towards Mutual Funds. If in case you have any considerations, questions, or suggestions, please don’t hesitate to contact us through e mail at assist@tickertape.com or chat with our assist workforce. 

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