PhonePe Launches Loan: In a significant leap toward transforming India’s digital lending landscape, PhonePe has rolled out its brand-new Loan Against Mutual Funds (LAMF) facility. This innovative service allows users to secure loans up to ₹2 crore within 10 minutes, all from the comfort of their smartphones — without the hassle of traditional paperwork or lengthy bank visits.
The move marks another bold step by PhonePe, a leading fintech platform, to diversify its offerings beyond digital payments and into the fast-growing lending space.
Benefits of PhonePe’s Loan Against Mutual Funds
| Feature | Description |
|---|---|
| Instant Access to Funds | Loan approval and disbursal in under 10 minutes. |
| No Sale of Investments | Retain mutual fund units and continue earning market-linked returns. |
| No EMIs | Pay interest only on the amount you actually use. |
| Completely Digital | End-to-end online process via the PhonePe app. |
| Flexible Limits | Borrow up to ₹2 crore based on mutual fund value. |
| Zero Paperwork | No physical document submission required. |
What Is Loan Against Mutual Funds (LAMF)?
A Loan Against Mutual Funds is a type of secured loan where investors can pledge their mutual fund units as collateral to get instant liquidity without selling off their investments.
PhonePe’s new LAMF facility ensures users can retain their market-linked returns while simultaneously accessing quick funds for emergencies, business needs, or personal goals.
How PhonePe’s LAMF Works
PhonePe’s LAMF service has been launched in collaboration with DSP Finance, a tech-driven NBFC backed by the DSP Group, one of India’s leading asset management firms.
Here’s how the system works:
- Pledge Mutual Funds – Users can pledge mutual fund units held in their account as security.
- Instant Loan Disbursal – Based on fund value, PhonePe calculates an eligible loan amount (up to ₹2 crore).
- Flexible Repayment – No fixed EMIs! Users only pay interest on the withdrawn amount.
- No Forced Redemption – Investors continue earning returns on their mutual fund portfolio.
Also read: Google Pay Now Gives Personal Loans in Minutes – Should You Borrow
Step-by-Step Guide: How to Avail LAMF on PhonePe
If you’re a PhonePe user, here’s how you can apply for a Loan Against Mutual Funds in just a few minutes:
- Open or Download the PhonePe App from Google Play Store or Apple App Store.
- Go to the “Loan” section on the homepage.
- Select “Loan Against Mutual Fund” from the available options.
- Enter your PAN details and verify via the OTP sent to your registered mobile number.
- PhonePe will automatically fetch eligible mutual funds and compute your loan amount.
- Complete KYC and set up AutoPay for interest payments.
- Digitally pledge your mutual fund units and sign the loan agreement online.
- Receive instant cash in your linked bank account!
What Industry Leaders Say
Hemant Gala, CEO of PhonePe Lending, highlighted the company’s mission to democratize credit access in India. “We are revolutionizing secured lending by enabling our users to unlock the latent value of their investments. This is a big step toward empowering Indians with seamless access to financial products,” he stated.
Meanwhile, Jayesh Mehta, CEO of DSP Finance, emphasized the strategic collaboration: “Our partnership with PhonePe combines DSP Finance’s expertise in secured lending with PhonePe’s unmatched digital reach. Together, we’re creating a lending experience that is both convenient and empowering for customers.”
Why This Move Matters
PhonePe’s entry into the secured lending space reflects a growing trend in India’s fintech ecosystem — where digital-first platforms are bridging the gap between savings and liquidity. With more Indians investing in mutual funds, the ability to leverage those assets for short-term financial needs without disrupting long-term growth has become increasingly valuable.
This launch could redefine how middle-class investors view their mutual funds — not just as investment tools, but as collateral for instant financial flexibility.
Also Read: Instant Loans Made Easy: 10 RBI-Approved Apps You Can Trust in 2025
About PhonePe Launches Loan
Founded in 2016, PhonePe has evolved from a simple digital payments platform into a full-fledged fintech ecosystem, offering services such as: UPI payments & money transfers, Insurance products, Gold investments, Personal and business loans, Bill payments and recharges. With over 500 million registered users, PhonePe continues to innovate in digital finance, driving India closer to its cashless economy vision.