Understanding The Working Behind Loan Against Securities And Mutual Funds

Posted by rima chauhan on October 18th, 2019

Most of us wish to make more money with the money we earn – a reason why many of us prefer to opt for investments in high potential avenues like equities, mutual funds, etc. instead of the low yielding investment avenues like fixed deposits, NSCs, and so on. And when you invest money in equities, you have the freedom to withdraw the amount invested at any stage if you have an urgent need for cash. Even with mutual fund investments, your money gets locked in only for a few years after which you have the flexibility to withdraw the money whenever a situation arises.

In other words, both these avenues offer more liquidity capabilities. However, is that the objective with which you invest in them. Don’t you wish to continue getting the benefits of dividends, stock splits / bonus announcements, and so on from your investments in equities as well as mutual funds? These investment areas give us the opportunity to generate wealth in the long term with rise in NAVs and stock prices – and by liquidating equities or mutual funds we might lose out on that opportunity. So, what is the alternative if you face with a situation where you need funds urgently? Of course, you may not want to opt for a personal loan where the interest rates are too high.

For such a scenario, there are options like loan against mutual fund or loan against securities. All you need to do is consult a reliable financial advisory firm like JMFL, who shall help you apply for an overdraft or loan against your investments in mutual funds or stocks. This method empowers you to secure your present without having to compromise your future wealth generation opportunities. You can simply pledge your equities (shares you hold) or mutual funds as collateral and grab a loan against them. A NBFC (non banking financial company) like JM Financial and their team of expert financial advisors help you to ensure the entire process is seamless while you opt for loan against securities or mutual funds.