Exit Load is a fee or tax that is levied on money withdrawn from mutual funds.
It is normally only valid for a limited time and then there is no exit load.
To deter early withdrawals from mutual funds, an exit load is imposed.
It is usually about 1% of the value withdrawn in the first year for most equity mutual funds. There is no exit load after that.
The exit load varies from one fund to another.
Exit loads on equity mutual funds are usually applied for a considerably longer duration than they are on debt funds.
How Exit Load is calculated?
In the previous example, the exit load (1 percent) is paid on the entire amount you withdraw.
You will be charged an exit fee of Rs 1,000 if you withdraw Rs 1,00,000 before one year from the date of investment.
Is it possible to prevent it?
Yes, you can avoid paying the exit load by not withdrawing before the time limit ends.
