Loan Against Mutual Funds Made Easy: PhonePe, Paytm, BharatPe and Cred Now Offer Instant Cash Facility

In a significant move to simplify access to quick cash, leading fintech platforms PhonePe, Paytm, BharatPe, and Cred have introduced the option to take a loan against mutual fund investments directly through their apps. This new facility allows investors to leverage their mutual fund units for immediate financial assistance without redeeming their investments or going through lengthy bank procedures.

Mutual Funds as Collateral

Many people invest in mutual funds to build wealth over time, but few realize that these investments can also be used as collateral to secure a loan. With this new feature, investors can pledge their mutual fund units and get a loan within minutes. The process is completely digital and requires minimal documentation, making it far more convenient than traditional bank loans.

Fast Approval and Instant Disbursal

The biggest advantage of taking a loan against mutual funds through these apps is the speed and ease of approval. After a quick digital verification of the mutual fund units, the loan amount is approved within minutes and credited directly to the borrower’s bank account. This makes it an ideal solution for those who face sudden financial emergencies but do not want to liquidate their investments.

Lower Interest Rates Compared to Personal Loans

Fintech companies are offering this facility at competitive interest rates, often lower than those charged on personal loans or credit card advances. Since the loan is secured against mutual fund holdings, lenders face less risk, enabling them to keep interest rates more affordable.

Key Benefits for Investors

• No Need to Break Investments: Borrowers can retain their mutual fund investments while getting the cash they need.

• Quick and Paperless Process: Entire process—from application to disbursal—is completed digitally within a few minutes.

• Flexible Repayment Options: Many platforms provide convenient repayment plans, allowing borrowers to pay back at their own pace.

• Lower Interest Rates: Pledging mutual funds generally attracts lower rates compared to unsecured loans.

Growing Trend in Digital Lending

The entry of big names like PhonePe, Paytm, BharatPe, and Cred into the loan-against-investment segment signals a major shift in the Indian lending ecosystem. By integrating mutual fund loans into their platforms, these companies are making it easier for millions of investors to access credit without disturbing their long-term financial plans.

How to Apply

Applying for a loan is simple. Users need to log in to their preferred app, select the “Loan against Mutual Funds” option, and complete the online verification process. Once the pledged units are confirmed, the loan amount is instantly credited to the registered bank account.

This innovative feature is particularly helpful for individuals facing urgent cash needs—such as medical emergencies, education expenses, or short-term liquidity gaps—while ensuring that their investment goals remain intact. With fintech giants entering this space, borrowing against mutual funds is set to become one of the most convenient and cost-effective ways to access credit in India.