CRED, the fintech platform known for offering premium financial products to creditworthy individuals, has introduced a new digital credit facility named CRED cash+, allowing users to borrow money by pledging their mutual fund investments. This innovative product helps users maintain exposure to the market while gaining immediate liquidity—something especially relevant during financial crunches or urgent needs.

A Game-Changer in Retail Lending

CRED cash+ is designed to offer liquidity without disrupting long-term financial growth. Traditionally, when investors need money, they’re forced to redeem mutual fund units, often prematurely. This triggers capital gains taxes, breaks compounding benefits, and affects long-term portfolio planning.

With CRED cash+, members can instead pledge mutual fund units and borrow at interest rates starting from 8.99%. This line of credit is more flexible and cost-effective than personal loans or credit cards.

Eligibility and Process: Fully Digital, Seamless Experience

The standout feature of CRED cash+ is its completely digital and paperless setup. Members can pledge open-ended mutual fund units—whether equity, debt, or hybrid—as long as they’re managed by asset management companies (AMCs) registered with Registrar and Transfer Agents (RTAs) like CAMS or KFintech.

There is no minimum Assets Under Management (AUM) requirement, making the offering accessible to a wider pool of retail investors, not just high-net-worth individuals (HNIs).

Key ineligible instruments include:

• Closed-ended funds

• Exchange Traded Funds (ETFs)

• Fund of Funds (FoFs)

How the Pledging Mechanism Works

Once mutual fund units are selected, the platform facilitates lien marking through the respective RTA. This means:

• Investors retain ownership

• They continue earning dividends or capital gains

• Units are simply locked as collateral

This feature provides a unique advantage over traditional loans where assets are liquidated or held entirely by the lender.

RBI Compliance and Smart Loan Structuring

CRED adheres to RBI-mandated Loan-to-Value (LTV) ratios, ensuring that the borrowing remains within safe limits. The platform even recommends an optimal basket of mutual funds to pledge. This recommendation is generated with an emphasis on risk diversification and maximizing eligible credit.

Once the pledge is marked:

• Users can draw funds instantly

• Repayment can be done via EMIs

• There are no pre-payment or foreclosure charges

• The credit line is reusable, i.e., one can redraw funds multiple times

Tax and Credit Score Benefits

Borrowing against mutual funds offers key tax advantages, especially when compared to premature redemptions. By avoiding liquidation, users:

• Avoid short-term capital gains tax

• Preserve their compounding returns

Additionally, this type of loan improves the credit mix, which can positively impact credit scores.

Bringing Awareness to a Forgotten Lending Product

According to Akshay Aedula, who leads product and growth at CRED, loans against mutual funds (LAMFs) remain underutilised in India. Historically, such offerings were confined to HNIs and routed through non-digital, high-touch interactions with wealth managers.

“Most retail investors default to gold loans or unsecured personal loans due to lack of awareness,” Aedula notes. With CRED cash+, the company aims to democratise access and educate users about the advantages of pledging over redeeming.

Product Vision and Long-Term Utility

At its core, CRED cash+ is a tool for modern wealth management. It provides:

• Instant access to liquidity

• Protection of long-term wealth

• Flexible repayment with zero penalty

According to Aedula, “Our goal is to help members meet liquidity needs today, while their investments continue to compound for tomorrow.”

The Road Ahead for Digital Collateral Lending

CRED cash+ signals the start of a larger fintech-driven trend that blurs the line between investment management and credit access. By enabling digital pledging and borrowing, platforms like CRED:

• Encourage more responsible borrowing

• Help investors stay invested longer

• Promote financial literacy and tax efficiency

As this product gains adoption, it could potentially reshape how Indians view emergency credit—moving away from consumption-based borrowing towards strategic asset-backed liquidity.

Why It Matters for Indian Investors

In a country with low financial product penetration, initiatives like this have the potential to:

• Educate users on the value of investments

• Prevent wealth destruction through unnecessary liquidation

• Expand the reach of smart borrowing options beyond the top financial strata

By packaging it within the CRED ecosystem—known for its exclusive user base and tech-savvy UX—the company ensures that members have a secure and seamless journey while interacting with this service.

Conclusion: A Smart Step Toward Responsible Wealth Unlocking

CRED cash+ represents the future of collateralised lending in India. It brings:

• Digital ease

• Financial prudence

• And investor-centric design

to an area that has long been overlooked.

If adopted widely, this offering could empower a generation of investors to stay invested, enjoy compounding gains, and manage liquidity with minimal financial disruption.

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