What is Entry Load and Exit Load in Mutual Fund ?

Mutual Fund Companies incur some expenses to float a fund and also they have many administrative and operative expenses. So to meet those expenses they collect a percentage of fee from the investors, that is called loads.

If they collect the fee when you buy the units, then it is called as entry load.
If they charge that fee when you sell your units back to them then it is called as exit load.

let me check hold on i will edit my answer in a min

Entry and exit loads are amounts you have to pay the organizers of the mutual funds at the beginining and at the end of your mutual fund term. It is best to choose mutual funds with no loads, that way you can get the most of your money.

it is the charge one has to pay to invest in mutual funds.
gen it is 2.25 &1%

Mutual funds have some fixed costs such as managing, issueing, buying selling and so..
This charges are approximatelt charged to the unit sale and purcase.
generally it is about 2.25% for equity and negligible for liquid MFs
These are covered from purchaser or seller; or from both.
This depends upon the policy of the MF manager.
before buying one should see these charges. when it is cobverd from purchaser, it looks negative return on initial days.

SBI has entry load of 2.5 and no exit load, There is a proposal to do away with this load.

Hello.

My understanding of entry load and exit load is this.

Entry load is a fixed rate collected by a mutual fund company upon the purchase of share. For example, the entry load is 2.5% for $5,000 to $9,999, 2% for $10,000 to $49,999 and so on. Some mutual fund companies charged the entry load exclusive of vat. See computation below.

entry load = 2% (exclusive of vat of 12%) = .0224
net asset value per share on the date of purchase = $2.190

If you invest $10,000, you will receive 4,464 shares.
$10,000 - ($10,000 x .0224) = $9,776/$2.190 = 4,463.93 or 4,464 shares

While exit load is a fixed rate charged by the mutual fund company upon the sale of your share or investment. Unlike the entry load, the exit load is based on the holding period of your investment. For example, less than 1 yr holding period has 2% exit load, 1 yr to less than 2 yrs has a 1% exit load and so on. See computation below.

holding period is less than 1 yr.
exit load = 2%
no. of shares to sell = 2,000 shares
net asset value per share on the date of sale = $4.25

You will receive an amount of $8,330.
2,000 shares x $4.25 = $8,500 - ($8,500 x .02) = $8,300

money you pay for investing in a MF and money you pay for getting out and taking back your money - with some profits/lossees added.
No one does work free -
when you join an MF the agent has to be paid-
When you withdraw = you are upsetting the MF
hence the charges

entry loads are normally charged by the fund houses for their marketing expenses (agent/broker comission). and exit loads are charged for fund house expenses (inorder to avoid frequent churning.)

Go to www.mfea.com. That site explains load and no-load funds.