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  • Fixed Deposit BYTES FROM OUR KITCHEN

    Loan against Fixed Deposit

    One can easily get a loan against their FD even if you do not have a credit score or meet the income eligibility criteria to apply for a loan. One of the main advantages of holding a Fixed Deposit (FD) is that it comes with a loan/overdraft facility. The bank will issue you a loan against your term deposit by using it as a collateral. Apart from this, the interest rate charged for loans taken against your term deposit will be much less when compared to traditional loans, where the interest rate charges are comparatively much higher. FD is one of the most popular types of investment options in India because it offers numerous advantages. Many banks in India offer loans against FDs including State Bank of India (SBI), HDFC Bank, ICICI Bank and Axis Bank, among other banks. Loans can be obtained on both domestic and NRI FDs.

    So, if you are looking for a loan to meet some financial emergency? Consider taking one using your FD and avail multiple benefits such as lesser interest rate, waiver on processing fee, among other benefits. Let us understand more about how to apply for a loan against FD, how banks grant such loans and the various benefits of opting for such a method.

    Apply for Fixed Deposit

    How do banks grant loans against FDS?

    Banks usually consider this type of loan as a demand loan or an overdraft. So, the loan is basically given in the form of an overdraft.

    Interest rates on loans against FD

    The interest rates charged for these types of loans are much less when compared to traditional loan interest rates. So the interest rate charged is just around 2% to 3% more than the FD interest rate. For example, if you are earning an interest rate of 6% on your time deposit, the loan will granted at the rate of around 8%. This is much lesser than your average loan interest rate that usually ranges from around 9% to 15% or even more depending from bank to bank.

    Amount of loan that is granted against FD

    Most banks grant around 70% to 90% of the total FD value as a loan. For example, if you have a time deposit for Rs.5 lakhs, you can avail 90% of it as a loan, which will work out to be Rs.4,50,000. You can still continue to earn interest on the remaining Rs.50,000 even after the loan is granted.

    Benefits of Car Loan against Fixed Deposit

    Loan tenure and payment procedure

    The period for which the loan is taken should ideally be the same as the tenure of the FD. It is possible to take the loan for a tenure that is lesser than the FD tenure. However, the tenure cannot be more than that of the time deposit tenure. For example, if the tenure of your term deposit is 10 years, the loan tenure can range anywhere between 1 year and 10 years. However, it cannot be more than 10 years.

    Foreclosure charges for Loan on Fixed Deposit

    Most banks in India do not avail any type of foreclosure charges if the customer closes the loan earlier than the said tenure.

    Loan against domestic FD

    There are many banks in India that offer loans against domestic term deposits. These loans are offered to all Indian residents with minimal documentation.

    Loan against NRI FD

    Non-Resident Indians (NRIs) who invest in various NRI term deposits such as Non-Resident External (NRE), Non-Resident Ordinary (NRO), and Foreign Currency Non-Repatriable (FCNR) deposits, can also apply for a loan against their respective time deposits. There are many banks in India that offer this facility.

    Thinking to Get Personal Loan against Fixed Deposit. Get more information here: Personal Loan against Fixed Deposit

    How to apply for a loan against your FD online

    • Step 1: Log on to your bank portal and login to internet banking by keying in username and password
    • Step 2: Go to the fixed deposit option and click on ‘Overdraft against FD’ option
    • Step 3: Fill in relevant details like how much loan you want to avail, the tenure, etc and submit the application
    • Step 4: The loan will be approved online and you will get a notification in this regard through email and SMS

    How to repay the loan taken against FD

    Many banks offer flexible repayment options and customers can pay regular EMIs. You can also pay in a lump sum if you have funds available and the bank will not penalize you for settling the loan early.

    Documents required to apply for a loan against FD

    Since the bank already has the documents that you are already a customer, the application process will be hassle-free, quick and fast when compared to a regular loan approval. The only documents required are the FD receipt and the loan application form.

    Benefits of availing loan against FD:

    • Lower interest rate: To put it simply, it is much more economical to take a loan this way using your FD because you will be paying a much lesser rate of interest. This way, the cost of your loan is much cheaper than a regular loan.
    • No processing fee: In most cases, there is no kind of processing charge for availing a loan through this method. This is a great because it will help you reduce the overall cost of the loan.
    • Hassle-free application process: Applying for this type of loan is very easy, requires very less documentation and is sanctioned faster. The application process is very user-friendly and many banks allow customers to apply online without any hassle.
    • No need to break FD: The best part of applying for a loan this way is that you can get a loan sanctioned and at the same time continue to earn interest on the FD.

    Features

    No. Feature Information
    1. Eligibility All customers, single and joint account holders
    2. Amount of loan 70% to 90% of deposit amount
    3. Security/collateral Existing time deposit/FD
    4. Repayment period Should not exceed the tenure of the FD
    5. Type of loan Demand or overdraft
    6. Channels to apply Internet banking and branches
    7. Processing fee Nil
    8. Interest rate Around 2% to 3% higher than FD rate in most cases

    FAQs

    1. Can minors apply for a loan against FD?
    2. No. Only account holders above the age of 18 with a valid FD can apply for a loan.

    3. Can joint account holders also apply for a loan against FD?
    4. Yes. These type of account holders will have to visit the bank branch and apply for the loan.

    5. What will happen if the account holder does to make payments towards the loan?
    6. In such a case, the bank will use money in the term deposit to adjust the payment against the loan that is availed.

    7. Should both the joint account holders sign on the loan document?
    8. Yes, this is the process for joint account holders.

    9. Is it possible to apply for a loan against a tax saving fixed deposit?
    10. No. This facility is not available when it comes to tax saving FDs.

    11. Is it true that joint account holders cannot apply for a loan against FD online?
    12. Yes. Those holding a joint account will have to visit the bank branch to initiate the loan application process.

    13. What is the maximum and minimum amount of loan that a customer can get under this facility?
    14. The maximum amount depends on the FD amount. The maximum loan you can get is 90% of the total value of the term deposit.

    15. Is it possible to make repayment through EMI options on FDs?
    16. Yes. This is especially true for preferred or long-term customers on most cases. Banks might also offer certain special offers.

    17. Can I break the FD or close it prematurely during the loan tenure?
    18. No. This will not be possible until you settle your loan.

    19. Can I first open an FD and the apply for a loan on it?
    20. Yes, this is possible.

    Customer Reviews

    • YES Bank Fixed Deposit
      "Fraud by Yes Bank"
      0.5 1.0/5 "Really Bad"
      Yes Bank has not credited Interest for my Fixed Deposit. On enquiring they gave me a story that the interest amount has been adjusted towards TDS. They have not provided credit entry for the interest and the debit entry for the TDS respectively.
      Was this review helpful? 0
      , bhopal
      Reviewed on Jan 11, 2019
    • ICICI Bank Fixed Deposit
      "Smart Investment"
      0.5 5.0/5 "Blown Away!"
      In ICICI fixed deposit interest rate is around 6.75% per annum, I opened the FD through online. I have invested Rs. 1 lakh they wont take any charges for the pre matured fixed interest. I believe the interest rate is good compared to the government bank.
      Was this review helpful? 2
      , yamuna nagar
      Reviewed on Jan 10, 2019
    • Kotak Fixed Deposit
      "Average service"
      0.5 3.0/5 "Satisfactory"
      I am having a Fixed Deposit account with Kotak Mahindra bank, they provide good services when compared to other banks. I get good interest rate in returns after the maturity period which is after 3 years. Customer support is average with Kotak Mahindra bank.
      Was this review helpful? 1
      , chennai
      Reviewed on Jan 10, 2019
    • HDFC Bank Fixed Deposit
      "Hassle free"
      0.5 5.0/5 "Blown Away!"
      I also have a fixed deposit account with HDFC Bank. The process to open this account is easy. I can do it online. They also offer a good rate of interest on the account. The bank has always been up to the mark to ban with. It is very convenient and easy.
      Was this review helpful? 2
      , noida
      Reviewed on Jan 09, 2019
    • IOB Fixed Deposit
      "Better Banking Experience"
      0.5 4.0/5 "Great!"
      I have invested a fixed deposit with Indian Overseas Bank. My wife has recommended me about this bank since she is working over there. I invested the money of Rs. 50000. I don't remember about the tenure period. Before 1 years, i have invested the money with them.
      Was this review helpful? 0
      , tiruchirapalli
      Reviewed on Jan 09, 2019
    • ICICI Bank Fixed Deposit
      "Good Deposit"
      0.5 5.0/5 "Blown Away!"
      I have invested a fixed deposit with ICICI. There is no reason for selected this bank. They have offered me a interest rate of 6.5% and there is no processing fee. I have invested the money 8 months before. This is a one year plan. I'm happy about the services provided by the ICICI for this account
      Was this review helpful? 1
      , thane
      Reviewed on Jan 04, 2019
    • Corporation Bank Fixed Deposit
      "Average"
      0.5 4.0/5 "Great!"
      I had account with Corporation Bank and its very old one. I put fixed deposit before 3 to 4 years. The interest rate was around 7% which was minimum compared to others but am satisfied. I have deposited for 5 years. Actually have not taken any benefits, just have invested. The customer service was okay.
      Was this review helpful? 3
      , pune
      Reviewed on Jan 04, 2019
    • HDFC Bank Fixed Deposit
      "Good service"
      0.5 4.0/5 "Great!"
      I do have a fixed deposit account with HDFC Bank. They are giving good interest. I can manage this account on line. I have chosen HDFC because of bank financial is good. I have just started long time, The process was very quick and it was done through on line.
      Was this review helpful? 3
      , thane
      Reviewed on Jan 02, 2019
    • SBI Fixed Deposit
      "Best Investment plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in State Bank Of India . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 4
      , ahmedabad
      Reviewed on Dec 29, 2018
    • review Fixed Deposit
      "Good online features on FD"
      0.5 5.0/5 "Blown Away!"
      In Saraswat bank they are providing the interest around 7% per annum, the minimum amount Rs. 5000 to max, still my FD is running with this bank. The online options are excellent without visiting I can track the interest and deposit amount through online.
      Was this review helpful? 1
      , pune
      Reviewed on Dec 17, 2018
    • HDFC Bank Fixed Deposit
      "Convenient FD with HDFC"
      0.5 5.0/5 "Blown Away!"
      In HDFC I can deposit for minimum of Rs. 5000 to max amount. I done the investment of one time payment around Rs.6 lakhs. I can chose the tenure period based on the convenient, it gives the interest of 7% its maximum. I can open and close the account through online.
      Was this review helpful? 5
      , pune
      Reviewed on Dec 17, 2018
    • SBI Fixed Deposit
      "Very Good Service"
      0.5 4.0/5 "Great!"
      I had made this investment pretty long time back and the services which they had provided so far has been good. The interest rate with them has been good and the growth with the investment has also been good. Their customer support has been helpful in guiding with everything.
      Was this review helpful? 8
      , bangalore
      Reviewed on Dec 14, 2018
    • YES Bank Fixed Deposit
      "Excellent Service"
      0.5 5.0/5 "Blown Away!"
      It has been a good service which they had been providing so far and i had started this investment a log time back. Their customer support has been helpful in guiding me in the investment plans and explaining with the growth of the investment. The interest rate with them has also been good.
      Was this review helpful? 3
      , bangalore
      Reviewed on Dec 14, 2018
    • Citibank Fixed Deposit
      "Not satisfied with the service"
      0.5 1.0/5 "Really Bad"
      I had started this investment a pretty long time back and they had been providing a good service. Their customer support has not been responsive and i do not suggest any one to make an investment through them. There has not been a good growth with the investment.
      Was this review helpful? 1
      , bangalore
      Reviewed on Dec 14, 2018
    • SBI Fixed Deposit
      "Good Investment Plan"
      0.5 4.0/5 "Great!"
      I have taken fixed deposit account in STATE BANK OF INDIA . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and response.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 4
      , mumbai
      Reviewed on Dec 12, 2018
    • Post Office Fixed Deposit
      "Good investment plan"
      0.5 5.0/5 "Blown Away!"
      I have started investing in the fixed deposit almost more than 5 years. I have invested a variable amount in different times. They have offered me a interest rate of 7.5%. The response was good. I have chosen the post office because of the safe and security.
      Was this review helpful? 12
      , guwahati
      Reviewed on Dec 12, 2018
    • YES Bank Fixed Deposit
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have the fixed deposit account with the Yes bank and the interest rate they have given me is good, also the customer service is good too they have co-ordinated with me well they time to time update me about there date of pay my next fixed deposit date.On line banking services are fine one too and am really happy with them.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Dec 11, 2018
    • Axis Bank Fixed Deposit
      "Average bank to avail fixed deposit"
      0.5 4.5/5 "Excellent!"
      I have chosen the Axis bank for my fixed deposit. I have deposited around of Rs. 50000. Since they are providing very good services in their branch. They have offered me a interest rate of 6.5%. I put the money in 2015. I have visited their branch many times and the service is very much prompt. I had no issues with them.
      Was this review helpful? 2
      , hyderabad
      Reviewed on Dec 11, 2018
    • ICICI Bank Fixed Deposit
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      My fixed deposit is with ICICI Bank. I had to go to the bank and meet the executive and open the account. I can close the account online. There is a lock in period for 12 to 13 months. The interest I earn is satisfactory. I have a deposit of 70K. Overall good.
      Was this review helpful? 0
      , new delhi
      Reviewed on Dec 07, 2018
    • Punjab National Bank Fixed Deposit
      "Good Investment Plan"
      0.5 5.0/5 "Blown Away!"
      I have taken fixed deposit account in Punjab National Bank . They are not charging any charges for the account . I used to get income tax benefits . Am satisfied with the customer service and resonance.They are giving good rate of interest . Overall am happy with my account .
      Was this review helpful? 1
      , new delhi
      Reviewed on Dec 06, 2018
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