Banks and other financial institutions offer a financial service known as a loan against fixed deposit (FD), which allows you to borrow money with your fixed deposit as collateral. Those who want to keep their fixed deposit investment but need money right away may benefit from this. This article will cover the fundamentals of a loan against FD, as well as its features, benefits, and application process.
Loan Against FD Overview
Bank | Loan Limit |
State Bank of India | Up to 90% |
ICICI Bank | Up to 90% |
Bank of Baroda | Up to 95% |
Axis Bank | Up to 85% |
HDFC Bank | Minimum Rs. 25,000 |
Citibank | Up to 90% |
Kotak Mahindra Bank | Up to 85% |
Yes Bank | Up to 90% |
Punjab National Bank | Up to 90% |
Canara Bank | Up to 90% |
What is a Loan against FD?
A sort of secured loan known as a loan against fixed deposit allows borrowers to obtain a loan in exchange for pledging their fixed deposit as security. The amount of the FD deposit determines the loan amount. This can reach between 90% and 95% of the total deposit.
Who can Apply for a Loan against FD?
- FD registered in a minor’s name is not acceptable for this facility.
- A 5-year tax-saving FD (fixed deposit) investor is not eligible to apply for this kind of loan.
- All holders of fixed deposits, whether individual or joint account holders are eligible for a loan against their deposits.
Features of our Loan Against Fixed Deposit
- LAFD at an interest rate of 2% over the FD rate: 2% interest rate over the FD rate for LAFD.
- Zero foreclosure charges: There are no fees associated with foreclosure. For your loan to be put into foreclosure, you can visit any BFL branch.
- Flexible tenure option: Get a loan for at least a month. The loan can be taken out for any length of time between one month and the duration of your deposit.
- Loan of up to 75% of deposit value: Take out a loan against your fixed deposit for up to 75% of the total deposit value or 60% of the non-cumulative deposit amount. The minimum loan amount is Rs. 3,000.
- No need to pay any EMI: The borrower does not have to pay any interest once the loan is obtained. Before the loan’s maturity date, you can pay back the loan amount and interest at any time. The amount will be deducted from the FD’s maturity proceeds if it is not paid by then. NACH is not necessary.
Documentation Required
- Duly signed agreement
- Application form duly signed
- Fixed/Term Deposit receipts duly discharged in favor of the bank
Step-by-Step Guide to Apply for a Loan Against Fixed Deposit
- Visit any Loan website.
- To sign in, enter your mobile number and select “GET OTP.”
- Enter the OTP that was texted to your mobile device. You will be taken to our customer service portal, My Account, upon successful verification.
- Click “View Details” under “My Relations” next to the deposit you want to use as collateral for a loan application.
- Select “Get a loan against FD” from the list of “Quick Actions.”
- Enter the desired loan amount and select “Generate OTP.”
- After entering the OTP that was sent to your mobile number, hit “Submit.”
Conclusion
A fixed deposit (FD) loan is an excellent way for people to protect their investments while receiving the funds they require immediately. The advantages of this secured loan option include large loan amounts, flexible repayment terms, and no early repayment penalties. These features allow borrowers to access funds quickly and easily, providing financial security during times of need.