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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.

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    Customer Reviews

    • HDFC Bank Fixed Deposit
      "Its Good"
      0.5 5.0/5 "Blown Away!"
      I had fixed deposit in HDFC for the amount of Rs.10,000 then I withdrawn in two months I got some interest. I went to the bank for account opening within few minutes they helped to open the account. There is no charges for pre matured liquidity fund.
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 25, 2019
    • HDFC Bank Fixed Deposit
      "Good Returns from HDFC"
      0.5 4.0/5 "Great!"
      As per the guidance , I taken a Fixed Deposit in HDFC . This is one year plan and worth enough to take this plan in HDFC comparing with the interest rate . I am really happy with the better returns for my FD . I thought of continuing after one year also .
      Was this review helpful? 0
      , hyderabad
      Reviewed on May 13, 2019
    • HDFC Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I am using HDFC Bank Fixed Deposit for the past 6 years ,using net banking is also good ,customer service is good .flexy deposit ,whenever required can take the amount and can deposit it later .There was no issues faced so far .The Banking service is good to me so far.I am satisifed with the banking service.
      Was this review helpful? 1
      , chennai
      Reviewed on May 13, 2019
    • Oriental Bank of Commerce Fixed Deposit
      "Trusted investment for the future"
      0.5 5.0/5 "Blown Away!"
      I have fixed deposit with Oriental Bank of commerce, they give interest rate around 7.5%when I was invested but I am not sure about current one. However there is no charges applicable for the fd maintenance, They have nice online banking to open or close the account and its a trusted one.
      Was this review helpful? 0
      , bangalore
      Reviewed on May 13, 2019
    • ICICI Bank Fixed Deposit
      "Have to be more quick in their procedure"
      0.5 3.0/5 "Satisfactory"
      I have Fixed Deposit with ICICI also which was matured earlier even it was a tax free accounts they are charging some amount. Before the financial year completion, i need to submit the document to income department to get my fund but the procedure is too long and I did not get the money. I had done investment of 1L and 0.50L which am unhappy. I would suggest them to provide the bills on time after this experience have stopped investing with them.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 12, 2019
    • HDFC Bank Fixed Deposit
      "Very much convenient"
      0.5 5.0/5 "Blown Away!"
      My all time favorite is Fixed Deposit which is secured and I can count the returns on evey month which am most comfortable. My family all have them are having in HDFC account, the manager is very friendly and rendering the service. Am doing investment since 2011 and their services are more good than the profit.
      Was this review helpful? 1
      , hyderabad
      Reviewed on May 12, 2019
    • Axis Bank Fixed Deposit
      "Convenient fixed deposit"
      0.5 4.0/5 "Great!"
      My fixed deposit was opened with Axis bank, I invested around Rs. 1 lakh for one year. If I want I can also extend the tenure. I believe the rate of interest is more than 7% for per annum. I can also track the fixed deposit through online banking its more simple.
      Was this review helpful? 4
      , thane
      Reviewed on May 04, 2019
    • HDFC Bank Fixed Deposit
      "Userfriendly FD experience"
      0.5 4.0/5 "Great!"
      I do have fixed deposit with HDFC, I opened it through online there is no locking period, while opening I have specified the maturity date. Minimum deposit start from Rs. 5000, they are providing 7.3% per annum. Its safe and secured to invest money with HDFC.
      Was this review helpful? 2
      , bangalore
      Reviewed on May 03, 2019
    • SBI Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I am having fixed deposit with State Bank Of India ,interest is good .The banking service is good so far .I have not faced any issues so far .Money will be safe on this account .Whenever need money can take and can deposit as well .The banking service is good and satisfied so far .Will get frequent update as well. I am satisfied with the overall service.
      Was this review helpful? 6
      , faridabad
      Reviewed on Apr 30, 2019
    • Canara Bank Fixed Deposit
      "Good nservice"
      0.5 5.0/5 "Blown Away!"
      I am having fixed deposit with Canara Bank ,interest is good .The banking service is good so far .I have not faced any issues so far .Money will be safe on this account .Whenever need money can take and can deposit as well .The banking service is good and satisfied so far .Will get frequent update as well.
      Was this review helpful? 0
      , faridabad
      Reviewed on Apr 30, 2019
    • Punjab National Bank Fixed Deposit
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      Iam having fixed deposit with Punjab national bank ,interest is good .The banking service is good so far .I have not faced any issues so far .Money will be safe on this account .Whenever need money can take and can deposit as well .The banking service is good and satisfied so far .Will get frequent update as well.
      Was this review helpful? 0
      , faridabad
      Reviewed on Apr 30, 2019
    • SBI Fixed Deposit
      "Can do better"
      0.5 3.0/5 "Satisfactory"
      SBI gives only 6.7% of interest for the fixed deposit, there is some charges applicable for the per matured liquidity amount. They take 1% from the paid amount, its not flexible as HDFC. The customer dealing is also average to resolve the queries.
      Was this review helpful? 3
      , delhi
      Reviewed on Apr 29, 2019
    • HDFC Bank Fixed Deposit
      "Flexible Fixed deposit"
      0.5 5.0/5 "Blown Away!"
      HDFC Is more convenient to open and close the FD through online, they give better interest as per the RBI around 6.8%. The online portal is easy to track the fixed deposit details, the help desk is good to handle the queries. I am very much happy with HDFC. I can take the tenure from three months to max tenure.
      Was this review helpful? 0
      , delhi
      Reviewed on Apr 29, 2019
    • SBI Fixed Deposit
      "Good in services"
      0.5 4.5/5 "Excellent!"
      My fixed deposit is with State Bank of India. I can open and close this account online. The interest I earn is satisfactory. The customer services and response is good and in all it is a smooth process and there are no unwanted charges taken for the same.
      Was this review helpful? 4
      , bangalore
      Reviewed on Apr 29, 2019
    • HDFC Bank Fixed Deposit
      "Satisfied with the service"
      0.5 5.0/5 "Blown Away!"
      I have a fixed deposit account with HDFC Bank and the banking process is good. I could open this account online and the account has been beneficial too. I earn a good interest. I can also close this account without having to go in person to the bank. It can be done online too.
      Was this review helpful? 2
      , bangalore
      Reviewed on Apr 26, 2019
    • andhra Bank Fixed Deposit
      "Better"
      0.5 3.0/5 "Satisfactory"
      I have a fixed deposit with Andhra Bank because the service is good and have been maintaining savings account. The branch is near to my place. It was taken 10 years ago. They are giving 6.5% interest rate. The locking period is 2 years and its a flexible scheme.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Apr 25, 2019
    • SBI Fixed Deposit
      "Its Good"
      0.5 5.0/5 "Blown Away!"
      For SBI fixed deposit there is no locking period, as per the customer convenience they can chose 7 day to 10 years of term. There is pre matured charges they take it from the invest amount . SBI is trusted and reputed and upto Rs.10,000 deposit there is no tax deduction.
      Was this review helpful? 7
      , visakhapatnam
      Reviewed on Apr 24, 2019
    • HDFC Bank Fixed Deposit
      "Good Service I am getting"
      0.5 3.5/5 "Pretty good"
      I normal deposit a cash of either 10 or 15 k in my fixed deposit because I don't have much surplus cash . Nowadays just for the name sake depositing my money in FD . Though they provide very less returns but the guarantee of getting the money back is sure .
      Was this review helpful? 1
      , hyderabad
      Reviewed on Apr 23, 2019
    • Axis Bank Fixed Deposit
      "Very Assured Fixed deposit"
      0.5 5.0/5 "Blown Away!"
      I opened a Fixed deposit in Axis bank for one year of term period . They sent a physical copy for my fixed deposit which gives a good assurance about that bank . So that my nominee can be aware of my FD and can approach them very easily if something happens to me . I can check the status of my FD through on line itself .
      Was this review helpful? 1
      , hyderabad
      Reviewed on Apr 23, 2019
    • HDFC Bank Fixed Deposit
      "Excellent services"
      0.5 4.5/5 "Excellent!"
      The best bank for a fixed deposit is HDFC Bank. The customer support is good and they are responsive as well. They offer an interest like other bank on my savings. The best is there is no lock in period so I close this account when ever I want too and I can do it with just a click away online. Where as other banks they would ask me to go to the home branch.
      Was this review helpful? 4
      , new delhi
      Reviewed on Apr 16, 2019
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