New Delhi, June 16 -- Just like personal loans offer a way to access quick funds, there is another option that taps into the value of your existing investments - loans against mutual funds.

This process involves pledging units of mutual fund schemes to a lender in exchange for a sanctioned loan amount. It allows the investments to remain in the borrower's name.

Through this credit method, first-time borrowers or people with low credit scores can obtain loans without paying a high interest rate.

Pledging yourmutual funds means using your investments as security for your loan.

Instead of selling your units during an emergency or cash crunch, you can borrow money against them and pay yearly interest only on the borrowed amount.

A person...