No, you don't need a good CIBIL score to get a loan against mutual funds (LAMF). LAMF is a secured loan backed by your mutual fund units, so lenders look mainly at the value of the funds you pledge, not your credit history. Even with a low score or no credit history, you can usually get funds without selling your investments.
A low CIBIL score can feel like a locked door. Personal loan applications get rejected, credit card offers dry up, and the loans you do get come with high interest. But if you invest in mutual funds, you already have the key: your portfolio.
1Why a Low CIBIL Score Blocks Most Loans
A CIBIL score is a three-digit number between 300 and 900 that reflects your past repayments. A score of 750 or above is generally considered good. Personal loans and credit cards are unsecured, so the lender has nothing to fall back on. Your CIBIL score becomes the deciding factor, and a low score often means rejection.
2Why Loan Against Mutual Funds Is Different
With LAMF, your mutual fund units are lien-marked (pledged) in favour of the lender through the registrar, such as CAMS or KFintech. Your money stays invested, and the lender has security. Because your investments back the loan, your portfolio matters far more than your credit score.
What lenders actually look at:
- Value of your portfolio: the more your pledged funds are worth, the higher your loan limit
- Type of fund: debt funds usually get a higher loan-to-value than equity funds
- Approved schemes: your funds must be on the lender's approved list
- KYC: basic identity and bank account checks
| Factor | Loan Against Mutual Funds | Personal Loan |
|---|---|---|
| Loan type | Secured | Unsecured |
| Good CIBIL score needed? | No | Yes |
| Main approval factor | Value of pledged funds | CIBIL score and income |
| With a low score | Approval possible | Often rejected |
| Interest rate | Usually lower | Usually higher |
3Who Benefits the Most
- Investors with a low CIBIL score from past missed EMIs or card dues
- New-to-credit borrowers with no loan or card history, such as first-time earners or retirees
- Self-employed professionals whose income proof doesn't fit a bank's checklist
4Use LAMF to Rebuild Your CIBIL Score
A loan against mutual funds is reported to credit bureaus like any other loan. Since January 2025, RBI has required lenders to report credit data at least every 15 days, so good repayment shows up on your report faster than before.
- Pay interest on time, every time
- Use only what you need, not your full limit
- Top up quickly if fund values fall and there is a margin shortfall
Over time, a well-managed LAMF can lift your score, opening doors to other loans too.
5How SLiQ Makes It Simple
SLiQ is a fully digital platform that connects you to regulated lenders for loans against mutual funds, shares and insurance policies. Pledge your funds online, get money in your bank account, and keep your investments growing.
Check your loan against mutual funds eligibility on SLiQ in minutes, without selling a single unit.
6Key Takeaways
- You don't need a good CIBIL score to get a loan against mutual funds
- Lenders focus on the value and type of your mutual funds, not your credit history
- LAMF works even if you have a low score or no credit history
- Repaying your LAMF on time can rebuild your CIBIL score
7Frequently Asked Questions
No. LAMF is secured by your mutual fund units, so the value of your portfolio matters more than your credit score.
Yes. Because the loan is backed by your investments, a low score usually does not stop you from getting LAMF.
Yes. New-to-credit investors can get a loan against mutual funds, since approval is based mainly on the funds pledged.
There is usually no fixed minimum score. Lenders decide mainly on your portfolio's value and the schemes you pledge.
Yes. Paying interest and dues on time is reported to credit bureaus and can steadily improve your score.
For the full cost comparison against a personal loan, see Loan Against Mutual Funds vs Personal Loan: Which Is Cheaper in India? or see how SLiQ compares to other LAMF platforms in Best Loan Against Mutual Fund Platform in India.
Low CIBIL score? Check your LAMF eligibility on SLiQ in minutes.
sliqfin.com | +91-9136542858 | lasinfo@sliqfin.com | Backed by Rainmatter (Zerodha)
Loan approval and terms are subject to the lending partner's policy and credit assessment. Interest rates, loan-to-value ratios, and eligibility criteria are indicative and may vary by lender and borrower profile. This article is for informational purposes only and does not constitute financial advice. Please consult a qualified advisor before making borrowing decisions. Backed by Rainmatter (Zerodha).
