HDFC Bank is now offering digital loans against mutual funds in collaboration with CAMS. Customers at HDFC Bank can easily take loans within 2-3 minutes against their mutual fund holdings. The amount will be disbursed to the current account of the customer and this can be used as an overdraft facility as well. The loans will be provided against equity and debt funds across 10 leading fund houses and only for portfolios which are single holdings.
Rs. 1 lakh is the minimum loan amount with the maximum being Rs. 10 lakh and Rs. 1 crore for equity and debt funds respectively. Up to 50% of the value of their mutual fund portfolio can be obtained as a loan by borrowers. Being an overdraft facility, the rate of interest will apply right from the time when the borrower withdraws the amount. Interest rates will be charged only on the amount which is utilized by the customer.
The customer’s track record and relationship with HDFC Bank will be key factors in ascertaining the final rate of interest which will range between 10.5-11%. The rates for unsecured personal loans, in comparison, are usually between 14-15%. Digital loans against securities were introduced in 2017 by HDFC Bank while it also launched digital unsecured personal loans previously. Around 25-30% of unsecured personal loans are applied for digitally at HDFC Bank with overall growth of approximately 30% in this segment as per reports.