Need Cash? Don’t Break Your Investments—Do This Instead
A client once asked me, Why should I take a loan against my mutual funds?
Won't that hurt my investments?
This is a fair question.
Most people view debt as something to be avoided.
But here's what 20 years in financial services taught me:
Dent isn't bad. Bad debt is bad.
Taking a loan to buy a depreciating car? That's bad debt.
Taking a loan against your mutual funds to seize a business opportunity? That's strategic.
Here's why loans against mutual funds make sense:
- Your investments keep growing while you access liquidity.
- Interest rates are often lower than those for personal loans or credit cards.
- No need to break your SIPs or lose out on compounding.
- Fast approval, minimal documentation.
Think of it this way:
- You've built a portfolio worth ₹20 lakhs over years of disciplined investing.
- An opportunity comes up. Maybe a business expansion. Maybe a high-return investment.
- You could redeem your mutual funds, lose the compounding benefit, and pay exit loads and taxes, or you could borrow against them, use the funds productively, and let your investments continue working for you.
The key?
Use borrowed money for assets that generate returns, not liabilities that drain your wallet.
At AND Fintech, we help clients unlock liquidity without disrupting their wealth-building journey.
Instant access.
No selling.
Your money works twice.
The question isn't whether you should borrow. The question is: what are you borrowing for?
Have you ever considered leveraging your investments instead of liquidating them?
Originally published on LinkedIn
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