Fintech firm MyFi launches MyCash to offer instant loans against mutual funds
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The platform offers a credit line ranging from ₹10,000 to ₹5 crore, providing instant liquidity with a 10.5% interest rate.
Traditional financing options, such as credit cards and personal loans, often come with high interest rates.
A recent survey by LocalCircles found that 58% of borrowers pay over 25% interest on credit options, with credit card rates reaching 36-48% annually.
MyCash aims to offer a more affordable alternative by allowing users to access funds instantly while their investments continue to grow, the company said.
“Investors often face a tough choice—break investments or struggle with financial needs,” said Kiran Nambiar, CEO & Co-Founder of MyFi. “With MyCash, they can access funds without compromising their long-term financial goals.”
How MyCash works
MyCash operates as a Loan Against Mutual Funds (LAMF), where users can borrow money using their mutual fund holdings as collateral. The process is entirely digital.
Interest is charged only on the withdrawn amount for the duration it is used.
The platform also personalises borrowing by leveraging AI-driven analysis. It assesses a user’s financial profile to determine an appropriate credit limit and interest rate.
“Traditional lending follows a one-size-fits-all approach, but AI-driven models allow for tailored credit terms,” added Nambiar. “Users with strong financial habits can benefit from better interest rates and higher credit limits.”
Loan-to-Value (LTV) based on fund type
The borrowing amount depends on the type of mutual fund:
- Equity mutual funds: Up to 45% of the investment value (buffer maintained for market fluctuations)
- Debt mutual funds: Up to 75%
- Hybrid/multi-asset funds: LTV varies based on composition
MyCash allows users to repay the principal at any time without prepayment penalties. Users also have the option to pay only the interest each month.
“We want to simplify liquidity access while ensuring investors don’t have to compromise on long-term financial growth. We have partnered with lenders like DSP Finance and Tata Capital,” said Nambiar.
ALSO READ | PhonePe Wealth launches CRISP to simplify mutual fund selection
(Edited by : Anshul)
First Published: Mar 19, 2025 5:50 PM IST
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