Instant loans against mutual funds are offered by the fintech platform Yenmo, which has raised $500,000 in a seed fundraising round headed by US startup incubator Y Combinator.

Yenmo, which was founded by Aryan Agarwal and Ashutosh Purohit, allows consumers to borrow money at a fixed 10.5 percent interest rate against their investments. Investors have real-time access to all of their assets, can choose which assets to borrow against, and can receive money straight into their bank accounts.

During the loan's term, users are only required to pay interest; the principal can be repaid whenever funds are available. Additionally, Yenmo bases loan approval decisions on consumers' mutual fund investments rather than credit scores.

The platform provides other businesses with a full-stack API solution to include loans secured by mutual funds into their offerings. It also intends to introduce new goods including land, insurance, digital gold, and loans secured by stocks.

"We aim to bring in a suite of lending options that were only accessible to high-net-worth individuals previously, now to every Indian consumer," Purohit, chief executive officer and cofounder, Yenmo says.

“With Yenmo, they will no longer have to sell their mutual funds. Instead, taking a loan on it is a much better way to keep the investments intact, which will help your money grow in the long term while providing access to funds for immediate requirements,” adds Purohit.