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How to get loan against mutual funds at lower interest rate?

If you are getting unfavorable interest rates on your loan against mutual funds then learn the ways to lower down your interest rates and make them favorable. Dig in and know the ways!


Making wise investment decisions will go a long way in putting your hard-earned money into schemes that will fetch you profits in future. Mutual funds are taken as a safe route for your investments. 

Mutual funds can benefit you in many ways, as these investments are handled by experts and well-qualified team, ensuring your money in safe hands. Most people invest in mutual funds to get the benefit of easy withdrawal of money whenever required. You can even get a loan against your investment in mutual funds as it is a collective investment scheme, and the risks involved in mutual funds are comparatively lower.

Many leading lenders provide the loan against mutual funds, giving you the advantage of fast and assured finance up to Rs.10 crore. If you opt for a loan against mutual funds, you can get the benefits like convenient online application process, and a dedicated relationship manager to cater your needs related to the loan process.

But, the loan against mutual funds interest rate may put your investments into question due to high-interest rates. If you wish to take a loan against mutual funds, you will look for low-interest rates, will you not? The high-interest rates can make your pocket heavy and get a lower interest rate on your loan against mutual funds is a herculean task. But, is there any way out to lower the rate of interest?

The answer is ‘Yes,’ there are ways to get the lower interest rates on your loan. You can avail the loan at lower interest rates if you learn the following ways:

5 ways to bring down the loan against mutual fund interest rate

  1. Monitor your credit score   –  To lower down the interest rate, you must monitor your credit score or CIBIL score. The credit score and interest rates share an inverse relationship, which relates when the CIBIL score is high, the interest rate will be lower. The best loan rates are given to the borrowers who have a credit score of 750 or more.If you wish to boost your credit score for getting lower interest rates, you will need to keep a check on your credit score and make the required improvements. You can enhance your credit score by early payment of your existing loans, and timely paying your credit card bills.

  3. Negotiate with the lender –  Depending on your relationship with the lender, you may ask them to lower down the interest rate on your loan against mutual funds. If you have the history of timely repayment of the loan and your credit bills, you may get the opportunity of lower interest rates from your lender.

  5. Surf the market  –  To get the lower interest rate on your loan against the mutual fund, you should look the market thoroughly. You must enquire and search the best loan option out of many available in the market. Comparing the different offers and deals of various lenders, you can get the right loan offer as per your needs and requirements.

  7. Choose a longer tenor  –  It is generally suggested to go for a wide loan tenor if you don’t want to face the burden of your loan. If the principal amount of your loan is divided over a wide tenor, you can avail the benefit of small EMIs. By doing so, you will end up in paying larger interest amount over the whole tenor, but the monthly charge will be comparatively less.

  9. Maintain a constant employment history –  It is important to maintain your employment history as lenders prefer borrowers who have a constant and regular employment history. If your income shows a decline, you may get a higher interest to pay on your loan.


The Bottom Line

Knowing the benefits is not always helpful to take the loan, finding the best loan at favorable interest rate will give the actual benefit. So, if you are getting unfavorable and high interest rates, then you know what next to do. Work on the points mentioned above and bring down your loan against the mutual fund’s interest rate.