Eligible Investment
The Mutual Fund units or shares must meet the lending partner's eligibility criteria.
LOAN AGAINST MUTUAL FUNDS & SHARES
Access liquidity without immediately selling your investments
Eligible Mutual Fund units or shares may be pledged as security to access financing through a lending partner, subject to the lender's eligibility criteria, terms and applicable requirements.
Where Prospera FinTech fits:
Prospera FinTech facilitates the process through lending partners. The lending partner
evaluates the application, determines eligibility and terms, and handles loan approval,
documentation and disbursement. Prospera FinTech does not sanction or approve the loan.
LIQUIDITY
Against eligible investments
Eligible Investment
Pledge as Security
Access Liquidity
Repay & Release
Investment → Pledge → Liquidity → Release
WHAT IT MEANS
Turn eligible investments into a source of liquidity
A loan against investments uses eligible Mutual Fund units or shares as security, allowing financing to be considered without immediately selling the underlying investment.
The investment is pledged. The lender provides the financing.
Depending on the eligibility of the securities and the lender's policies, an investor may obtain financing against eligible Mutual Fund units or shares by creating the required security or pledge.
The lender determines the eligible securities, loan amount, interest rate, margin requirements, documentation and other applicable conditions.
The investment therefore becomes part of the lending arrangement as pledged security while the borrower remains responsible for meeting the repayment and other obligations set out in the loan agreement.
HOW IT WORKS
From eligible investment to released pledge
Follow the flow to understand what happens at each stage and where the lending partner's role begins and continues
Pledge
The required security or pledge is created over the eligible investment according to the applicable process.
Lender Assessment
The lending partner evaluates the application and determines the applicable terms and conditions.
Access Liquidity
If the lending partner approves the facility, financing is provided according to the agreed loan documentation.
Repay & Release
After the applicable obligations are met, the pledge may be released in accordance with the lender's process and terms.
Important:
The exact process, timelines, eligible securities, loan amount, interest rate, margin
requirements and documentation are determined by the lending partner and applicable rules.
EXPLORE THE FLOW
What changes at each stage?
Select a stage to see the practical role of the investment, borrower and lending partner
ELIGIBLE INVESTMENT
Start with investments accepted by the lending partner.
Eligibility is determined by the lending partner. The applicable list of securities, valuation method and other conditions may vary by lender.
UNDERSTAND THE PROCESS
Discuss the Process
Want to understand how a loan against investments works?
Connect with Prospera FinTech to understand the facilitation process and the lending-partner route
BEFORE YOU PROCEED
Understand the obligations attached to the pledge
Accessing liquidity through pledged investments creates borrowing obligations that continue until the facility is repaid and the pledge is released
Interest obligation
Borrowing involves interest. The applicable rate and related charges are determined by the lending partner and the loan agreement.
Margin requirements
The lender may require the pledged investments to maintain a specified margin against the outstanding facility.
Investment value can change
If the value of pledged securities falls, the lender's required margin may no longer be maintained.
Consequences matter
Depending on the loan agreement, additional collateral, partial repayment or other action may be required if the margin falls below the lender's requirement.
Terms are lender-specific
Eligibility, loan amount, interest rate, margin, documentation and other conditions vary by lending partner and applicable rules.
Repayment releases the pledge
Once the applicable obligations are met, release of the pledged investment follows the lending partner's process and documentation.
WHO DOES WHAT?
Clear roles between Prospera FinTech and the lender
Keeping the facilitation role separate from the lending partner's responsibilities makes the process easier to understand
PROSPERA FINTECH
Facilitation & process coordination
Prospera FinTech facilitates the process and connects the requirement with relevant lending partners.
Prospera FinTech does not sanction or approve the loan, determine the final lending terms, or replace the lending partner's lending, verification or documentation functions.
LENDING PARTNER
Assessment, approval & lending
The lending partner determines eligible securities, assesses the application and decides the applicable loan terms.
The lending partner handles approval, documentation, disbursement, margin monitoring, repayment administration and release of the pledge in accordance with the loan agreement.
READY TO UNDERSTAND THE ROUTE?
Have questions about loans against investments?
Prospera FinTech can explain the facilitation process and the lending-partner route. Final eligibility and lending terms remain with the applicable lending partner.
Talk to Prospera FinTech
QUESTIONS PEOPLE ASK
Loan Against Mutual Funds & Shares FAQs
Straightforward answers to common questions about loan against investments
Can I take a loan against my Mutual Funds or Shares?
Depending on the eligibility of the securities and the lending partner's policies, investors may be able to obtain financing against eligible Mutual Fund units or shares by creating the required security or pledge. The loan amount, interest rate, eligible securities, margin requirements and other conditions depend on the lender and applicable rules.
Why would someone take a loan against investments instead of selling them?
A loan against eligible investments may allow an investor to access liquidity without immediately selling the underlying investments. However, borrowing creates an interest obligation and may involve margin or collateral requirements. The cost and repayment obligations should be understood before entering into the loan arrangement.
What happens if the value of my pledged investments falls?
If the value of pledged securities falls below the lending partner's required margin, the borrower may be required to provide additional collateral, repay part of the loan or take other action as specified in the loan agreement. The exact consequences depend on the lending partner's terms.
Loan against Mutual Funds or shares are lending arrangements provided through applicable lending partners. Eligibility, loan amount, interest rate, eligible securities, margin requirements, documentation, repayment obligations and other conditions are determined by the lending partner and applicable rules. Pledging investments as security involves borrowing obligations and may involve additional collateral requirements or other consequences if the applicable obligations or margin requirements are not met. Prospera FinTech's role is limited to facilitating the process through lending partners and does not constitute loan sanction, approval or lending by Prospera FinTech unless explicitly established by the applicable documentation.
