CRED has introduced CRED Cash+, a new digital credit product that lets members borrow money using their mutual fund investments as collateral, without needing to redeem them.
Akshay Aedula, head of product and growth at CRED, explained that this service provides liquidity while allowing users to keep earning returns linked to the market.
With CRED Cash+, users can access a flexible line of credit starting at an interest rate of 8.99%. The process is fully digital and paperless, requiring no minimum mutual fund balance.
Members can pledge open-ended equity, debt, or hybrid mutual funds managed by recognized registrars like CAMS or KFintech.
These registrars enable lien marking, so users retain ownership of their mutual fund units and continue to receive dividends or capital gains even while borrowing against them. However, close-ended funds, ETFs, and Fund of Funds are not eligible under this scheme.
The platform uses RBI-mandated loan-to-value ratios and suggests an optimal mix of mutual fund units to pledge. Borrowers can take loans, repay in EMIs, and redraw funds multiple times without prepayment or foreclosure charges.
Aedula highlighted that since investments remain intact, users benefit from market returns and avoid tax consequences from early redemptions. This also helps maintain a healthy credit score by improving credit mix.
CRED aims to raise awareness about loans against mutual funds, which have traditionally been limited to high-net-worth individuals through offline channels. By launching CRED Cash+, the company hopes to make this credit option accessible and easy to use for retail investors.
“Our goal is to help members meet their liquidity needs today while their investments continue to grow for the future,” Aedula said.
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