5 FinTechs offering Mutual Fund-Backed Loans in India

By Gloria Mathias

In India, the lending sector has experienced a significant transformation, with FinTech companies playing a pivotal role in reshaping the landscape. FinTechs have emerged as key players in the lending space by leveraging technology to streamline processes, improve accessibility, and provide innovative financial products. With a large population underserved by traditional banks, FinTech lenders have filled the gap by offering quick, convenient, and often more inclusive lending solutions.

One niche category within the Indian lending sector that has gained traction is loans against mutual funds. This innovative financial product allows individuals to unlock the value of their mutual fund investments without having to liquidate them. With the ongoing emphasis on personal savings and financial investments, Mutual funds are the popular choice. By pledging their mutual fund units as collateral, borrowers can access funds quickly and conveniently, often at lower interest rates compared to traditional loans.

This offering not only provides borrowers with liquidity when needed but also allows them to continue benefiting from potential market gains on their mutual fund investments. FinTech companies specialising in loans against mutual funds have streamlined the application and approval process, making it easier for individuals to access this form of credit with minimal hassle.

Listed below are 5 FinTechs disrupting the lending space in India:

• DhanLAP

Dhanlap, launched by Ark Neo Finance, is a digital LPaaS (Loan Platform as a Service) that caters to retail investors. Their flagship product, Loan Against Mutual Funds (LAMF), allows investors to unlock liquidity without selling their assets, with plans to expand to Loan Against Shares (LAS), Loan Against Insurance (LAI), and Loan Against Gold (LAG). The platform provides an easy, end-to-end digital process, ensuring quick disbursement of funds within 15 minutes.

• 50Fin

50Fin is a financial services company that specialises in loans against securities. It believes in the power of financial independence and empowers Indian retail investors to unlock the true potential of their investments by providing loans against securities at just 11% simple interest per year and loans against mutual funds. It aims to help one achieve their financial goals effortlessly.

• FinEzzy

FinEzzy is a one-stop personal finance solution designed to address savings, investments, protection (insurance), and credit within a single platform. FinEzzy empowers users to secure short-term credit against their mutual fund investments during financial emergencies rather than redeeming their investments.

• Volt money

Volt Money is a B2C lending platform that enables retail customers to get instant, low-cost & flexible credit by pledging their Mutual funds & stocks via a 100% digital.

• Yenmo

Yenmo is a financial platform that allows you to take loans at an interest rate of only 10.5% by pledging your mutual funds. It works with banks and NBFCs in India to offer a secure and seamless experience.