How Much Loan Can You Get Against Mutual Funds?

The first question every investor asks before applying for a LAMF (Loan Against Mutual Funds) is easy: how much will I actually get? Your loan amount against mutual funds depends on three things. What type of funds you hold. Their current NAV. And the lender’s internal LTV policy. Your credit limit is a percentage of your portfolio’s market value, and that percentage changes based on whether you hold equity, debt, or a mix of both.

This guide breaks down your loan amount against mutual funds with real portfolio scenarios, so you know your exact number before you apply.

Key Takeaways

Your credit limit is determined by the LTV ratio, which varies by fund type
RBI revised the LTV ceiling to 75% for equity MF units in February 2026, though most lenders apply internal limits of 45–50%
Debt mutual funds get a higher LTV at up to 85% for AAA-rated debt because of lower NAV volatility
NAV valuation follows RBI norms: lower of the 6-month average daily NAV or the previous day’s closing NAV
RBI has capped individual borrowing at ₹1 crore across the banking system, effective July 2026
SIP-purchased units are fully eligible once they appear in your folio

What Is the LTV Ratio and How Does It Affect Your Loan Amount?

LTV (Loan-to-Value) is the percentage of your portfolio’s market value that a lender offers as credit. A 50% LTV on ₹10 lakh means a credit limit of ₹5 lakh.

RBI sets the ceiling. Lenders apply their own internal limits within it based on fund volatility and risk appetite. That’s why the same portfolio might get you different amounts at different lenders.

How Much Can You Actually Borrow? Real Portfolio Scenarios

First Case: ₹3 Lakh in a Single Large-Cap Equity Fund

LTV at 50% = ₹1.5 lakh credit limit
Simple, straightforward. One fund, one calculation.

Second Case: ₹8 Lakh Split Across Equity and Debt

₹5 lakh in flexi-cap equity fund at 50% LTV = ₹2.5 lakh
₹3 lakh in liquid fund at 80% LTV = ₹2.4 lakh
Total credit limit: ₹4.9 lakh (blended LTV of ~61%)

Third Case: ₹20 Lakh Diversified Portfolio

₹8 lakh large-cap equity at 50% = ₹4 lakh
₹5 lakh corporate bond fund at 80% = ₹4 lakh
₹4 lakh hybrid fund at 55% = ₹2.2 lakh
₹3 lakh index fund at 50% = ₹1.5 lakh
Total credit limit: ₹11.7 lakh (blended LTV of ~58%)

Fourth Case: ₹1.2 Crore Portfolio

At a blended 55% LTV, the calculated limit would be ~₹66 lakh
But the RBI caps individual borrowing at ₹1 crore across the banking system, effective July 2026
In practice, your maximum is ₹66 lakh here, since it falls within the cap. But if your portfolio were ₹3 crore with a potential limit of ₹1.5 crore, you’d still be capped at ₹1 crore.

The takeaway: loan against mutual funds eligibility isn’t a single number. It’s a calculation that depends on your specific fund mix.

Which Mutual Funds Qualify for Pledging?

Eligible:

Large-cap, flexi-cap, multi-cap, and index equity funds
Debt, liquid, and overnight funds
Hybrid and balanced advantage funds
Most open-ended schemes from SEBI-registered AMCs

Not eligible:

ELSS funds under 3-year lock-in
Close-ended funds that haven’t matured
Portfolios below ₹50,000 (varies by lender)
Some sectoral and thematic funds (lender-specific)

One thing to note: Lenders maintain an “approved list” of eligible schemes, which is updated periodically. Always check the specific lender’s list before applying.

Can SIP Investors Get a Loan Against Mutual Funds?

Yes. This is a common doubt, and the answer is straightforward. Each SIP installment buys mutual fund units, which are added to your folio. Once those units are in the folio, they’re pledgeable.

The one exception is ELSS. Each SIP installment has its own 3-year lock-in from the purchase date. You can pledge only units that have completed their lock-in.

What Happens to Your Credit Limit When Markets Move?

Your credit limit gets recalculated daily based on the current NAV of your pledged funds.

If markets rise:

Your NAV goes up, and so does your available credit limit. You can withdraw more without pledging additional units.

If markets drop:

Your NAV falls, your credit limit shrinks, and the LTV ratio on your outstanding loan rises. If it crosses the lender’s threshold (typically around 60–65% for equity funds), a margin call is triggered. You’ll need to either pledge more units or make a partial repayment.

Practical tip:

Pledge only 60–70% of your total portfolio. Keep the remaining 30–40% as a buffer. If a margin call comes, you can pledge those buffer units instead of scrambling for cash.

5 Ways to Maximize Your Loan Amount Against Mutual Funds

Here are five practical ways to maximize your loan amount against mutual funds before you apply.

1.Include debt or liquid funds in your pledge

They carry up to 85% LTV compared to 50% for equity. A ₹3 lakh liquid fund gives you ₹2.4 lakh in credit. The same amount in equity gives you ₹1.5 lakh.

2.Consolidate small folios

If small holdings across multiple AMCs fall below the ₹50,000 minimum individually, consolidating into one scheme makes them eligible.

3.Pledge funds with stable NAV history

Lenders favour funds with lower volatility. A large-cap index fund is more likely to be on the approved list than a small-cap sectoral fund.

4.Check multiple lenders

Internal LTV limits and approved lists vary. One platform might offer 50% on a fund where another offers only 40%.

5.Time your application strategically

NAV is higher after a market rally. Your loan against mutual funds amount is directly tied to the prevailing NAV, so applying during a market upswing gives you a higher credit limit.

Know Your Number Before You Need It

The worst time to figure out your eligible mutual fund loan limit is during an emergency. Check your eligibility on Liquify today. The app shows your exact credit limit in seconds based on your current portfolio. Having that number ready means you can act within 24 hours when cash is actually needed.

Loan Amount Against Mutual Funds: How Much Can You Get?