Mutual fund investors today have access to a financing option that doesn’t require disturbing their portfolio: a loan against mutual funds. Instead of redeeming units and breaking a long-term investment strategy, investors can pledge their holdings as collateral and access funds while their investments continue to remain invested and grow.
One of the first considerations in this process is the minimum portfolio value required to qualify. This threshold determines whether an application can even be processed, before any calculation of loan amount comes into play. With RBI’s February 2026 guidelines reshaping how Loan-to-Value ratios work across lenders, this number has become more relevant — and more favourable — for borrowers than it was previously.
This article breaks down what the minimum portfolio value actually means, how it’s set across lenders, and how recent regulatory changes affect what a given portfolio can unlock.
What Does “Minimum Portfolio Value” Mean in LAMF?
Two numbers matter here, and it’s easy to mix them up.
- Portfolio value is simply your NAV multiplied by the units you hold — the current worth of your mutual fund holdings on any given day.
- Loan eligibility is a smaller number derived from that portfolio value, after the lender applies its Loan-to-Value (LTV) ratio.
The minimum portfolio value is neither of these exactly — it’s the entry bar. It’s the smallest portfolio size a lender will even consider before running the LTV calculation at all. Fall below it, and the application simply isn’t processed, regardless of how good your fund selection is.
Why does this floor exist? A few practical reasons:
- Every pledge involves lien-marking with the fund’s Registrar and Transfer Agent (CAMS or KFintech), and that coordination has a fixed cost regardless of loan size
- Monitoring margin levels on a small folio isn’t commercially efficient for the lender
- Below a certain ticket size, the servicing cost simply outweighs the interest earned
This is also where a loan against mutual funds differs fundamentally from an unsecured personal loan. An unsecured loan looks at your income and credit score first. A loan against mutual funds looks at your asset value first — which is why the portfolio threshold is the starting gate, not your salary slip.
Typical Minimum Portfolio Value Set by Lenders in 2026
There’s no single number here — the loan against mutual funds eligibility bar varies by lender, but a few patterns hold across the market:
- Most NBFCs and banks set ₹50,000 as the standard entry-level floor for a straightforward LAMF application
- Several digital-first lending platforms push this up to ₹1 lakh or more, particularly for equity-heavy portfolios where NAV volatility is higher
- There’s no RBI-mandated universal minimum — each lender decides this independently, based on their own risk appetite and operating cost structure
It’s also common for the same lender to set different thresholds by fund category. A debt-fund-only portfolio might clear the bar at a lower value than an equity-only one, simply because debt NAVs are more stable and easier to monitor for margin purposes. If your portfolio is a mix of both, most lenders will look at the combined value rather than each category separately.
Alongside the minimum value, it’s worth keeping an eye on the loan against mutual funds interest rate each lender offers, since this varies independently of the eligibility threshold — a lower minimum doesn’t always mean a more competitive rate.
The takeaway: don’t assume you’re below the minimum just because one platform quoted you a number. It’s always worth comparing more than one loan against mutual fund provider, on both eligibility and pricing, before ruling yourself out.
How RBI’s February 2026 Norms Changed the Portfolio-Value Equation
This is the part that’s genuinely changed the math for borrowers this year.
RBI’s February 2026 revision introduced uniform Loan-to-Value caps across lenders:
- Equity mutual funds: LTV of up to roughly 70-75%
- Debt mutual funds: LTV of up to roughly 80-85%
- A system-wide borrowing cap of ₹1 crore per person against mutual fund units, effective from July 1, 2026
Here’s why this matters for the minimum-value question specifically: a higher LTV means the same loan amount now needs a smaller portfolio behind it than before. In other words, the practical answer to “how much loan can I get against mutual funds” has improved for the same portfolio size.
A quick worked comparison makes this clearer:
- Equity portfolio of ₹1 lakh — under the older, more conservative LTV norms (closer to 50%), this would have unlocked around ₹50,000 in loan eligibility. Under the revised 70-75% band, the same portfolio can now unlock closer to ₹70,000-75,000
- Debt portfolio of ₹1 lakh — previously eligible for around ₹65,000-70,000 at older LTV levels, this can now reach ₹80,000-85,000 under the revised norms
The direction is clear: smaller portfolios are now more useful as collateral than they were a year ago, purely because of how the LTV bands have moved. It’s worth noting that the loan against mutual funds interest rate is set independently of these LTV bands — a higher LTV changes how much you can borrow, not what you pay for it.
How to Check If Your Portfolio Meets the Minimum
Working this out yourself takes just a few steps:
- Check your current NAV-based value — pull your Consolidated Account Statement (CAS) from CAMS, KFintech, or your AMC’s app to see today’s value, not your original invested amount
- Identify which schemes are eligible — most lenders exclude ELSS funds still within their lock-in period, and closed-ended funds generally don’t qualify at all
- Match the eligible value against the lender’s minimum — add up only the qualifying schemes
- Apply the LTV to arrive at your actual loan eligibility
A simple example: say you hold units across three schemes — a large-cap equity fund worth ₹40,000, a debt fund worth ₹35,000, and an ELSS fund worth ₹25,000 that’s still within lock-in. Only the first two count toward your eligible value, bringing your usable portfolio to ₹75,000 — comfortably past most lenders’ minimum floor.
One more detail worth knowing: SIP units that have already been allotted count toward your value immediately. Future SIP instalments you haven’t yet invested obviously don’t — only what’s already sitting in your folio counts on the day you apply.
Factors That Shape Your Effective Eligible Value
The minimum portfolio value gets you in the door. What happens after that depends on a few more variables:
- Fund category and its LTV band — equity, debt, and hybrid funds each carry different LTV treatment, so two portfolios of identical rupee value can unlock different loan amounts
- Approved scheme lists — your fund needs to be registered with the lender’s RTA partner (CAMS or KFintech) to be pledgeable at all; not every scheme in the market is automatically eligible
- NAV movement — since equity NAVs move with the market, lenders often build in a buffer for equity holdings, which can affect your working value day to day
- Existing liens — if units are already pledged elsewhere or under a hold, they won’t count toward a fresh application
- Joint holdings — for jointly-held folios, most lenders require all holders to be co-applicants, and how the value is treated can vary by lender policy
Ways to Build Up to the Minimum Threshold
If your current portfolio sits just under a lender’s minimum, there are a few practical, straightforward routes:
- Consolidate your folios — if you hold mutual funds across multiple schemes or even multiple demat accounts, most lenders will aggregate the total value across eligible folios rather than assessing each one in isolation
- Let SIP contributions accumulate — if you’re investing regularly, your eligible value grows with every instalment; many investors simply wait a few months for the SIP-driven growth to cross the threshold
- Look at overdraft-style LAMF products — some lenders offer a Drop Line Overdraft structure with a lower entry ticket than a standard term loan against mutual fund, which can be a useful alternative if your portfolio is on the smaller side
- Balance debt and equity holdings — since debt funds typically carry a higher LTV, a portfolio with some debt allocation can cross the eligible-value line faster than an all-equity one of the same rupee amount
Turning Portfolio Value Into Usable Liquidity
The minimum portfolio value is really just the entry gate — the real number that matters is what your specific fund mix and the current LTV bands translate into as usable loan eligibility. And as the 2026 RBI revisions show, that number has only gotten more favourable for borrowers recently.
If you’re sitting on a mutual fund portfolio and need liquidity without disturbing your long-term investments, a loan against mutual funds is worth a serious look. Your units stay invested, your returns keep compounding, and you still walk away with the funds you need — often at a competitive loan against mutual fund interest rate compared to unsecured alternatives.
That’s exactly what Bulwark Capital specialises in — quick, digital loan against mutual fund solutions, with a simple eligibility check to show you exactly where your portfolio stands. Visit bulwarkcapital.in and see how much your existing investments can unlock for you, without ever having to sell them.
