Quick answer: Yes, you can get a loan against mutual funds with a low or no CIBIL score. Because it is secured by your pledged units, no minimum credit score is required, and even someone with no credit history can qualify. Checking your eligibility on Volt Money is a soft check that does not affect your score.
If your CIBIL score is low, or you have never built one, most loans feel closed to you. Personal loans get rejected, credit cards get declined, and every application seems to make it worse. But there is a category of borrowing where your credit score is not the gatekeeper at all: a loan against your own assets.
A loan against mutual funds is secured by units you already own, so the lender does not depend on your credit history to feel safe. Below, we cover why no credit score is required, who gains the most from this route, and exactly how the process works from eligibility check to disbursal.
Why personal loans lean so hard on your CIBIL score
A personal loan is unsecured. There is nothing backing it, so the lender relies almost entirely on your credit score to judge whether you will repay. Most want a CIBIL score around 700 or higher. Worse, simply applying creates a hard enquiry that can nudge your score down, so repeated rejections make the next application even harder. For a full side by side, see loan against mutual funds vs personal loan.
Why a loan against mutual funds is different
Check your credit limit on Volt Money. Free, takes 15 seconds.
Check your limit →A loan against mutual funds is secured by your pledged units. The lender is protected by the collateral, not by your borrowing history, so on Volt Money no minimum credit score is required (policies vary by lender, and some LAMF providers do set a minimum score). Even someone with no credit history at all can qualify.
Two things follow, and both work in your favour:
- No minimum credit score is required. Your eligibility is based on your portfolio value, not your past borrowing.
- Checking your limit is a soft check. It has no impact on your CIBIL score, so you can see what you qualify for without any risk to your report.
Personal loan vs loan against mutual funds
| Factor | Personal loan | Loan against mutual funds |
|---|---|---|
| Collateral | None | Your mutual fund units are pledged |
| Credit score | High dependency, usually 700+ | No credit score required |
| Income proof | Usually required | Not required |
| Interest rate | Usually 14% to 30% p.a. | From 9.99% p.a. |
| Interest charged on | The full loan amount | Only the amount you withdraw |
| Your investments | No link to your portfolio | Remain invested and continue to participate in market movements |
Who this helps the most
- New-to-credit investors: young earners or first-time borrowers who have savings and SIPs but no loan history yet.
- The self-employed and freelancers: people with real assets but irregular income that unsecured lenders treat with suspicion.
- Anyone rebuilding: if a past default or a rough patch dented your score, your mutual funds can still get you credit while you recover.
- Investors who do not want a hard enquiry: even with a good score, some people would rather not add an enquiry to their report for a short-term need.
A worked example
Say your CIBIL score is 620, below what most personal loan lenders accept, but you hold Rs 8 lakh in mutual funds and need Rs 3 lakh.
Personal loan: likely rejected on the score, and each attempt adds a hard enquiry that pushes the score lower.
Loan against mutual funds: your Rs 8 lakh portfolio supports a limit of up to Rs 5.6 lakh at 70% LTV on equity. You draw Rs 3 lakh, pay interest from 9.99% p.a. only on that amount, and your score is never the deciding factor.
What you actually need to qualify
The requirement is an asset, not a score. To open a loan against mutual funds on Volt Money you need:
- Mutual fund units to pledge (from over 9,000 approved funds).
- Your PAN number and an Aadhaar-linked mobile number.
- Your bank account details.
KYC is completed with an OTP through DigiLocker, and you accept a Key Facts Statement and loan agreement. There is no branch visit, no document upload, and no credit-score hurdle. The loan account can open in under 10 minutes.
A few basic conditions apply. You should be an Indian resident, generally between 18 and 70 years of age, with an eligible credit limit of at least Rs 10,000. Debt funds and ELSS units held beyond their 3-year lock-in can also be eligible, subject to the lender-approved fund list.
Does a loan against mutual funds affect your CIBIL score?
Checking your eligibility on Volt Money does not impact your CIBIL score, because it is a soft check. Once your loan is open, though, it is still a real credit facility. Paying interest on time and repaying responsibly keep your credit profile healthy, while missed payments or a default can affect it, just like any other loan.
One honest caveat
No credit score is needed, but the loan is still a real obligation. Interest accumulates on what you draw, and because your limit tracks your portfolio value, a sharp market fall can trigger a margin call. Borrow within your means and keep an eye on your utilisation. A secured loan is easier to get, not free to ignore.
Low score? Check what your portfolio unlocks
Check your credit limit on Volt Money. Free, takes 15 seconds. Check your credit limit
The bottom line
A low CIBIL score closes a lot of doors, but not this one. Because a loan against mutual funds is secured by your units, no credit score is required, checking your eligibility does not touch your report, and even a thin or damaged credit history is no barrier. If you have investments, you have a path to credit.
