A mutual fund is an investment vehicle that combines the assets of many clients and invests that money in a series of securities. If you have mutual funds, you may have an ownership stake in a very wide variety of companies' stocks. If you need an immediate loan for medical expenses, college tuition, buying a first home or other needs, you won't be able to borrow money from the mutual account directly, because the money you have invested in the mutual fund is tied up in those securities.

Withdrawing Money from Your Mutual Fund Account

If your need for immediate cash is greater than your desire to grow your money, you may wish to withdraw part or all of the money in your mutual fund account. Your mutual fund charges fees for various activities such as withdrawals, and you will have to pay taxes on the withdrawal amount -- and usually a 10 percent penalty for withdrawing before the age of 59 1/2. When you place your withdrawal order, the trade should complete by the end of the day, and you typically can have the funds withdrawn from your account within a few days.

Brokerage Margin Accounts

Some brokerages and banks offer margin loans, whereby you use the value of your mutual fund account as collateral to fund a loan. A typical margin loan value does not exceed 50 percent of the value of your mutual fund account, and the proceeds of the loan are most often used for investing in other stock, bonds or mutual funds. Margin loan rates can be rather expensive, but for a short-term loan, this may be an option for your immediate needs.

Borrowing From Mutual Funds in a 401(k)

If you have an employer-funded 401(k), the plan might allow you to invest your retirement savings in mutual funds. Many 401(k) plans allow you to borrow against the mutual funds in your account up to 50 percent of their value. Any interest that is assessed for the loan will be paid back to your 401(k) account, and the payments for the loan can be levied from your paycheck. Your employer may set strict limits on the conditions under which loans can be extended; except when applied to the purchase of a home, the loan must be paid back to the account within five years.

Rolling Over an IRA

If you have a retirement plan at work through a 401(k), profit-sharing plan or individual retirement account, you may be able to roll those funds over to another IRA. If you reinvest the funds from your retirement account into the new IRA within 60 days, you will not be assessed a 10 percent tax on early distributions. You likely will be subject to a 20 percent withholding, but you may use the remaining funds from the distribution for any purpose as long as it is deposited into the new IRA within 60 days. This is a risky venture unless you are certain you will be able to recoup the funds and deposit them into the new IRA within the allotted 60 days.