New Delhi, June 25 -- Investors can digitally borrow funds against mutual fund holdings, that too without redeeming them. The pledged units remain invested, permitting investors access to funds while maintaining market exposure.

One such facility is provided by financial institutions such as HDFC Bank, ICICI Bank, Axis Bank among others through their online platforms. These services allow borrowers quick access to credit by pledging eligible mutual fund units without redeeming them.

A loan against mutual funds (LAMF) allows investors to pledge their fund units as collateral to get a credit line or overdraft. This also helps individual borrowers to meet short term financial needs and aspirations. That too without liquidating long term in...