How much can you borrow against mutual funds?

Lesson 42 of 53 · Loans against mutual funds · 3 min read · Reviewed 29 Oct 2026

Quick answer

Up to 75% of the value of equity and other non-debt funds and 85% of debt funds, under RBI’s rules for banks. Units are valued at the lower of the six-month average NAV and the previous day’s. Loans against shares and equity funds are capped at ₹1 crore per person across banks. A fall that breaks the limit must be fixed within 7 working days.

Banks lend up to 75% against equity funds, ETFs and REITs, 85% against debt funds and 60% against listed shares.

Units are valued at the lower of the six-month average NAV and yesterday’s, so a fall shrinks the limit quickly.

If the loan crosses the limit, you add units or repay within 7 working days.

Key idea: The units stay invested, so you keep the returns, but they are pledged until the loan is repaid.

Sources

Try the short quiz on this page to check what stuck.

Common questions

Is there a cap?

₹1 crore per person against shares and equity funds. Debt funds have no RBI cap.

Can I use it to buy shares?

Up to ₹25 lakh of the loan may go into the secondary market.

What about NBFCs?

Large NBFCs keep a 50% limit on loans against listed shares.

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