A fee charged by the fund house when you redeem mutual fund units before a specified holding period.
Exit load is a penalty-like charge levied on investors who redeem their mutual fund units before a holding period specified in the Scheme Information Document (SID). It is expressed as a percentage of the NAV at the time of redemption.
Most equity funds charge 1% exit load if you redeem within 1 year of purchase. So if you invested ₹1,00,000 and it's worth ₹1,10,000 after 8 months, and you exit, you pay 1% of ₹1,10,000 = ₹1,100 as exit load. After 1 year, most funds charge 0% exit load.
Exit load is specified in the fund's SID and can be zero, 0.5%, 1%, or higher depending on the holding period.
It is calculated on the redemption value (NAV × units redeemed), not on the original investment.
The collected exit load is added back to the scheme's assets — it benefits remaining investors.
Some funds have tiered structures: 1% if redeemed within 1 year, 0.5% in year 2, nil after 2 years.