Loan Against Mutual Fund
Terms & Conditions

To avail the Loan Against Mutual Fund (LAMF) facility through FundOra, the applicant must satisfy all of the following conditions:

• Must be a resident Indian individual, 18 years of age or older
• Must hold mutual fund units in their own name (joint holdings permitted with conditions — see below)
• Must have completed full KYC verification on FundOra platform
• Must possess a valid PAN card linked to the demat/folio account
• Must have a savings/current bank account in India for disbursement
• Units pledged must be in eligible schemes as approved by the lending partner
• Minimum portfolio value of ₹50,000 in eligible units required

The loan amount sanctioned will be a percentage of the Net Asset Value (NAV) of the pledged mutual fund units. LTV ratios vary by fund category as per RBI and SEBI guidelines:

Interest is charged on the actual amount drawn/utilized, calculated on a daily reducing balance basis:

The loan facility works on a pledge mechanism. Your mutual fund units are pledged as collateral — they are NOT redeemed. The process is as follows:

Once the pledge is confirmed by the AMC, the loan amount is disbursed as follows:

• Disbursement is made via NEFT/IMPS/RTGS to the borrower's bank account registered with FundOra
• Disbursement is made within 24 working hours of pledge confirmation
• The facility operates as an overdraft/credit limit — borrower can draw funds up to the sanctioned limit
• Minimum draw-down per transaction: ₹5,000
• Repaid amounts can be re-drawn within the tenure (revolving credit facility)
• The sanctioned limit is reviewed quarterly based on current NAV of pledged units

The loan must be repaid as per the terms agreed at the time of application:

• You may repay the full outstanding principal at any time without prepayment charges
• Partial principal repayment is allowed, which will proportionally release pledged units
• Interest must be serviced monthly — principal may be held until tenure end
• Auto-debit (NACH) mandate must be set up at the time of loan application

The following events constitute a default under this facility:

• Non-payment of monthly interest by the due date
• Outstanding principal not repaid by the end of tenure
• LTV breach due to fall in NAV, if not rectified within the stipulated time (margin call)
• Any material misrepresentation or fraud in the loan application
• Insolvency, bankruptcy, or legal proceedings against the borrower

You may close the loan facility before the end of tenure at any time:

• No prepayment penalty or foreclosure charges are applicable
• Pay outstanding principal + accrued interest up to the closure date
• Submit closure request through the FundOra platform or by emailing support
• Post full payment, lien release is initiated within 1 working day
• AMC confirms lien release within 1–2 additional working days
• No-Objection Certificate (NOC) is issued within 7 working days of closure

As a borrower, you are entitled to the following rights under applicable law and FundOra's Fair Practice Code:

• Receive a sanction letter with all key loan terms before disbursement
• Access a complete loan account statement at any time through the FundOra dashboard
• Receive 7 days' advance notice before any pledge invocation (except in extreme cases of margin breach)
• Receive excess proceeds (if any) after recovery of dues, in case of pledge invocation
• Lodge grievances through the FundOra Grievance Redressal Mechanism
• Request a copy of all loan-related documents at any time

During the loan tenure, the following restrictions apply to pledged units:

• Redemption: Not permitted on pledged units
• Switch: Not permitted — neither switch-in nor switch-out
• SWP (Systematic Withdrawal Plan): Suspended on pledged folios
• STP (Systematic Transfer Plan): Suspended on pledged folios
• Transfer/Transmission: Not permitted during pledge period
• Dividend Payout: Continues normally to registered bank account
• Growth/IDCW Reinvestment: Continues — additional units accumulate
• New SIP investments: Permitted in pledged folio (new units are not automatically pledged)

The following tax considerations are relevant to the LAMF facility:

• Taking a loan against MF units does not constitute a redemption — no capital gains tax is triggered at the time of pledge or disbursement
• Capital Gains Tax arises only if the lender (NBFC/bank) actually redeems the pledged units in case of default
• Interest paid on LAMF is not tax-deductible under personal income tax in most cases, unless the loan proceeds are used for a business purpose
• TDS on interest may apply as per applicable income tax laws
• GST at 18% is charged on processing fees and other service charges

In case of any dispute, grievance, or complaint related to the LAMF facility:

All disputes are subject to the jurisdiction of courts in Lucknow, Uttar Pradesh, India.

• FundOra acts as a facilitator between the borrower and the lending NBFC/bank. The actual loan is extended by a RBI-registered lending institution.
• FundOra reserves the right to modify these terms at any time. Updated terms will be published on the platform with 15 days' prior notice.
• The borrower shall not use loan proceeds for speculative purposes, gambling, or any activity prohibited by law.
• These terms shall be governed by and construed in accordance with the laws of India.
• Electronic acceptance (clicking "I Agree" or submitting the loan application) constitutes a legally binding agreement.
• FundOra's liability is limited to its role as a facilitator and does not extend to the acts/omissions of the lending partner.
• Loan eligibility, LTV ratios, and interest rates are subject to change based on market conditions and lending partner policies.