When financial emergencies strike, many borrowers turn to secured loans to unlock quick liquidity without selling their assets. Two of the most popular options today are Loans Against Mutual Funds (LAMF) and Gold Loans.
Both can provide fast funding, but which one makes more sense in 2025?
Let’s explore the differences and benefits with insights from Vizzve Finance.
Loan Against Mutual Funds (LAMF)
A loan against mutual funds allows you to borrow money by pledging your mutual fund units as collateral.
The lender holds the units until the loan is repaid, and you continue to earn returns on your investments during the tenure.
Key Highlights:
Loan-to-Value (LTV): Up to 50–60% of the mutual fund’s NAV.
Interest Rate: Typically between 8% and 11% per annum.
Tenure: Up to 3 years (may vary by lender).
Processing Time: Usually 24–48 hours.
Best For: Investors with a diversified portfolio who want to access liquidity without redeeming their mutual funds.
Gold Loan
A gold loan lets you borrow against your physical gold assets (jewelry or coins).
It’s one of the oldest and fastest ways to access credit in India, especially for short-term financial needs.
Key Highlights:
Loan-to-Value (LTV): Up to 75% of the gold’s market value.
Interest Rate: Usually between 7% and 13% per annum.
Tenure: From a few months to 3 years.
Processing Time: Instant to 1 hour.
Best For: Borrowers looking for quick, small-to-medium ticket loans with minimal documentation.
Gold Loan vs Loan Against Mutual Funds: Quick Comparison
| Feature | Loan Against Mutual Funds | Gold Loan |
|---|---|---|
| Collateral Type | Mutual Fund Units | Physical Gold |
| LTV Ratio | Up to 60% | Up to 75% |
| Interest Rate Range | 8–11% | 7–13% |
| Processing Time | 1–2 Days | Within 1 Hour |
| Loan Tenure | Up to 3 Years | Up to 3 Years |
| Returns Continue? | Yes | No |
| Market Risk | Affected by fund NAV | Affected by gold price |
| Ideal For | Investors with mutual funds | Households or individuals with gold assets |
Expert View — Vizzve Finance Insight
According to Vizzve Finance, the right choice depends on your asset type, urgency, and comfort with risk:
Choose a Gold Loan if you need instant liquidity, minimal paperwork, and have idle gold assets at home.
Opt for a Loan Against Mutual Funds if you want to retain your investment growth while availing funds at a competitive rate.
In 2025, both products remain strong liquidity options — but digital processing, flexible tenures, and transparent valuation are making loans against mutual funds increasingly popular among urban borrowers.
Key Takeaway
| Scenario | Recommended Loan Type |
|---|---|
| Need urgent cash within hours | Gold Loan |
| Want to keep earning on investments | Loan Against Mutual Funds |
| Prefer minimal risk of market fluctuations | Gold Loan |
| Want digital, paperless processing | Mutual Fund Loan |
❓ FAQs
1️⃣ Which loan is safer — gold or mutual fund loan?
Both are secured loans, but gold loans are less affected by market volatility compared to mutual fund-based loans.
2️⃣ Can I prepay either loan early?
Yes. Both loans can be prepaid partially or fully. Always check for prepayment terms before applying.
3️⃣ Do I lose ownership of my gold or funds?
No. The assets remain yours. They are pledged only as collateral.
4️⃣ Does Vizzve Finance offer both types of loans?
Vizzve Finance provides transparent guidance and access to multiple secured loan products tailored to your financial profile.
Final Thoughts
Whether you choose a Gold Loan or a Loan Against Mutual Funds, both can help you unlock the value of your assets without selling them.
In 2025, with rising financial awareness and flexible loan options, Vizzve Finance recommends comparing interest rates, LTV ratios, and processing speeds before applying.
Choose smart, borrow responsibly, and keep your assets working for you — because at Vizzve Finance, your financial growth always comes first.
Published on : 4th November
Published by : SMITA
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