There come many instances in our lives when we require money on short notice. When we do not have the required amount in our savings, we have to sell off our assets but during times of emergencies, even selling can be a tough job. It is for such times that loans were created.

So wouldn’t it be great if loans and our assets could be used at the same time without the need to sell the latter? Realising this possibility, financial institutions have come up with what are known as loan on mutual funds. What this essentially does is that it gives you the liberty of obtaining a loan against your assets, mutual funds in this case, and use it to meet your emergencies.

One of the biggest advantages of taking a loan against mutual fund is that you can get loan amounts of up to Rs. 10 crore and your assets keep earning returns as they were before obtaining the loan.

Before applying for any kind of loan, ensure that you check the background of the lender. This will help in finding out essential details such as the credibility, their past history, and how satisfied customers have been using their services.

Even though, in general, the terms and conditions pertaining to the eligibility criteria will remain the same, there will be some variations from one lender to the other. It is thus essential to check the criteria before applying as some financial institutions can even reject your application if the required criteria are not met.