It provides an end-to-end online journey for customers, starting from onboarding to disbursementTata Capital announced the launch of loan against mutual funds (LAMF) for customers to avail quick, hassle-free loans ranging between Rs 5 lakh - Rs 2 crore.
This is a first-of-its-kind offering in the mutual fund industry.
The financial services company of the Tata Group's digital loan offering is provided against a variety of debt and equity schemes across mutual funds (MFs).For this, customers can avail the loan amount by marking a lien on the mutual fund units which are managed by several asset management companies, according to a recent statement shared by Tata Capital.
The loan against mutual funds is backed byanalytics and is a personalised product suited fordiversefund requirements of customers.The mutual fund industry's assets under management (AUM) has grown from Rs 1,518,000 crorein July,2016 to Rs 3,532,000 croreinJuly, 2021, marking over atwo-fold increase in a span of fiveyears, according to AMFI (association of mutual funds in India).The loan amount inthe digital offering is customized based upon the value of the units in the mutual fund folio as well astenure, according to the statement.Some keybenefits of thedigital loan against mutual funds are as follows:It provides an end-to-end online journey for customers, starting fromonboarding to disbursementThe loan can be applied as an overdraft facility or as a term loanAs part of the offering, the auto renewal facility isavailable for a tenure exceeding one year - which is subject to review of the mutual fund portfolioThe on boarding journey is completed within a matter of minutesThe service portal consists of features fordrawdown, disbursement,additional pledging and de-pledging.
It also provides an easy online execution of documents.