Loan Against Fixed Deposit
Emergencies or the need for a loan can come up at any time. But there may be reasons which may be preventing you from getting a loan. It could be a low income or a low credit score which may make it difficult for you to get a loan.
Or you do not have much time to apply for a loan and wait for the approval and disbursement. In all these conditions, a loan against the security of a fixed deposit works very well.
What is a loan against a fixed deposit (FD)?
A fixed deposit is one of the popular avenues for saving due to the risk-free nature of the investment. Not many are aware that the FD can work as security against which you can draw a loan. To avail a loan against a Fixed Deposit, you will need to pledge the FD with the bank/financial institution and avail a loan against the safety of the deposit
Who is Eligible for a Loan Against FD?
Any person who has a fixed deposit either individually or in a joint account mode can avail of a fixed deposit loan. The only categories of fixed deposits that cannot be used as security are
- Fixed Deposits in the name of a minor
- 5 yr Tax Saver Fixed Deposits
What is the procedure to avail of a loan with Fixed Deposit as security?
The procedure to avail of a loan against an FD is very simple.
- All you need to do is approach the bank where you have a fixed deposit and ask for a loan against the security deposit.
- The fixed deposit will be pledged with the bank for the duration of the loan. But the deposit will continue to earn the same rate of interest as before.
- The loan is allowed as a one-time withdrawal or an overdraft facility.
What is the Loan Amount % that is Allowed?
In a loan against FD, the loan amount is linked to the value of the FD. In most cases, 90% of the deposit amount is allowed as a loan. For Example: If your FD is worth Rs 100000, your loan will be approved for Rs 90000. This could depend on other factors like your relationship with the lender, etc. However, the loan amount is determined at the sole discretion of the lender.
Loan Against Fixed Deposit Interest Rate
The interest on these loans is calculated at 1-2% above the FD Interest rate. Suppose the interest rate on your FD is 7.5%, the interest rate on the loan would be in the range of 8.5-9.5%
However, the loan amount and the interest charged are determined at the sole discretion of the lender.
Benefits of Loan Against Fixed Deposit.
There are many benefits of availing of a loan against an FD. The most important benefits being
- Interest rates lower than those on personal loans
- Works for low or no credit score
- No need to liquidate the investment to meet financial obligations
- Quick disbursal of the loan
- Easier to repay
- Can be easily availed by senior citizens as well
- Easy to close the loan any time as there is no pre-payment penalty
- Most banks do not charge processing fees for this loan
Banks that offer Loans Against FD & their Interest Rates
Most of the banks offer loans against fixed deposits. Let’s explore the interest rates and other terms and conditions offered:
Axis Bank Loan Against Fixed Deposit
| Minimum FD Amt | Interest Charged | % of FD allowed as loan | Available as |
|---|---|---|---|
| Rs 25000 | 2% above FD rate | 85% | Overdraft Facility |
SBI Loan Against FD
| Minimum FD Amt | Interest Charged | % of FD allowed as loan | Available as |
|---|---|---|---|
| Rs 25000 | 1% above FD rate 0.25% interest rate concession when availed through YONO/INB | 90% | Overdraft Facility or Demand Loan |
HDFC Bank Loan Against FD
| Minimum FD Amt | Interest Charged | % of FD allowed as loan | Available as |
|---|---|---|---|
| Rs 25000 | 2% above FD rate | 90% | Overdraft Facility |
ICICI Bank Loan Against Fixed Deposit
| Minimum FD Amt | Interest Charged | % of FD allowed as loan | Available as |
|---|---|---|---|
| NA | NA | 90% | NA |
Yes Bank Loan Against FD
| Minimum FD Amt | Interest Charged | % of FD allowed as loan | Available as |
|---|---|---|---|
| Rs 50000 | 2% above FD rate 1% for Senior Citizens | 90% | Overdraft Facility |
Punjab National Bank (PNB) Loan Against Fixed Deposit
| Minimum FD Amt | Interest Charged | % of FD allowed as loan | Available as |
|---|---|---|---|
| NA | Subject to Repo LInked Lending Rate | 80-95% depending upon the tenure of the loan | Overdraft Facility |
Apply for Money View Personal Loan in 2 Minutes
However, you can avail of a personal loan even without even the necessity of having a Fixed Deposit. Money View personal loans are instant, no collateral online loans that can be availed easily even by those with a low credit score or no credit score. So when you have a need for money and have no security to offer, apply for a hassle-free personal loan from Money View. Download our loan app today.
Contact Us
Do you require more information on personal loans from Money View or are looking for assistance in applying to a personal loan, write to us at loans@moneyview.in or call us at 080 45692002.