Is it your first time trying to apply for a loan against a mutual fund? Then, what you need is a step-by-step guide that can help you through the process. This guide will allow you to utilize the service in the simplest possible way. Moreover, the process structure is similar for almost every financing agency.
Besides, our post will even give you an idea of the correct process order. By keeping these simple steps in mind, you will be able to successfully submit your application. Thus, if you are a potential borrower, then continue reading to learn about loan against mutual funds.
- Funds eligibility
Mutual funds are of many different types. Hence a borrower should first confirm its eligibility before beginning the application process. To do so, you can simply visit the website of Reserve Bank of India to check the eligibility criteria. If your asset type is listed, then you will be able to acquire a loan against mutual funds.
- Find the right agency
The next step is the most critical one in the entire process. Before you can actually submit an application, you first need to find the right financing institute. This can be done by conducting online research and finding relevant institutes. Apart from this, you can even find financing firms according to your geographical location. This will make it easy for you to reach out to the company if something important comes up.
- Compare interest rates
Even though you’re acquiring a loan against mutual funds, you still need to think about the interest charges. There are various creditors that provide this particular service. Hence, you will be able to find a range of interest rate offerings easily. You can opt for a rate that suits your financial situation. However, it is always recommended to compare at least two or three options before making a decision.
- Gathering documents
Once you have narrowed down the ideal lender, you then need to check the document criteria. Every lender will have a different set of requirement. For this, it is essential to go through these requirements thoroughly. One document which will be required by every company to borrow a loan against mutual funds is alien. Apart from this, you may even be asked to submit your identity documents and bank details.
- Submit an application
There are two ways of applying for a loan against mutual funds. One is through the online platform of the agency. The other is physically visiting the office and filling out a form. You can opt for the most suitable option and submit an application through the same. However, there are some financing institutes that do not provide an online application process.
- Verification process
After you have successfully submitted the application, verification is conducted by the creditor. This process usually does not take a lot of time. It can range anywhere from 24 to 72 hours depending on the documents that you have submitted. Once the verification is complete, you will receive a notification for it on the registered email and mobile number.
- Receiving funds
At last, all you need to do is wait patiently for the funds to be transferred to your bank account. Apart from the financing firm’s notification, you will even be alerted by your bank regarding the transfer.
With all the above points explained, you can easily acquire a loan against mutual funds which would be very helpful for you at the time of financial crisis or any other emergency where you find yourself short of fundings. So whenever you are looking to apply for a loan against mutual funds keep all these points in your mind and also compare the interest rate of the various lenders who are providing this loan facility.