• Loan against Fixed Deposit

    You can avail loan against your Fixed Deposit if your credit score is low, you do not meet the income eligibility criteria, or if you have no other assets to pledge for a secured loan. The interest rate on such loans range between 1% and 2% above the FD rate and can be repaid in up to 60 months. These loans are usually given in the form of an overdraft or demand loan.

    Top Banks Offering Loan Against Fixed Deposit

    Name of the Bank Interest Rate Loan Amount
    Axis Bank 2% above term deposit rate Rs.25,000 onwards
    State Bank of India 1% above the relative FD rate Rs.25,000 to Rs.5 crore
    HDFC Bank 2% above the FD rate Up to 90% of your fixed deposit
    Federal Bank 2% above the FD rate Up to 90% of the deposit amount
    Karur Vysya Bank 5% to 7% Up to 90% of the deposit amount
    Deutsche Bank 2% above the FD rate Rs.25,000 onwards

    Axis Bank Loan Against Fixed Deposit – Features

    • Axis Bank Loan Against FD an be availed be in the form of overdraft
    • No prepayment charges
    • Avail up to 85% of your fixed deposit as loan
    Penal Interest Rate Penalty for pre closure Margin Repayment Period
    Not Applicable Nil Up to 85% of the value of the fixed deposit Contact the bank

    SBI Loan Against Fixed Deposit – Features

    • You can avail SBI Loan Against FD of up to 90% of the value of your fixed deposit
    • Loans are available in the form of overdraft and demand loan
    • No penalty for prepayment
    • The processing fees for the loan is nil
    • Loans can be availed through internet banking by visiting any branch of the bank.
    Penal Interest Rate Penalty for pre closure Margin Repayment Period
    @2% p.a. over and above the applicable interest rate Nil Up to 90% of the value of the fixed deposit 3 years to 5 years

    HDFC Bank Loan Against Fixed Deposit – Features

    • Option to choose between a current account and savings account to link to your FD
    • HDFC Bank Loan Against FD is available in the form of overdraft
    • Interest will be charged only on the withdrawn amount while the remaining FD will continue to accrue interest
    • Avail overdraft against FD on deposit held in single name instantly through net banking
    • A minimum FD amount of Rs.25,000 for a minimum tenure of 6 months 1 day is required to avail an overdraft.
    Penal Interest Rate Penalty for pre closure Margin Repayment Period
    - - Up to 90% of overdraft against FD Contact the bank

    Federal Bank Loan Against Fixed Deposit – Features

    • No processing fee or penal interest charged
    • Loan can be availed against FDs, Recurring Deposits (RDs), and cash certificate
    • Loans can be obtained from any branch of Federal Bank
    • Only the deposits that are free from restraint, lien, or encumbrance will be eligible for loans
    Penal Interest Rate Penalty for pre closure Margin Repayment Period
    - - Up to 90% of overdraft against FD Contact the bank

    Karur Vysya Bank Loan Against FD – Features

    • The disbursement of loan is done instantly
    • Loans can be availed against any type of deposit
    • Loans of up to 90% of the deposit amount can be availed
    • Original deposit receipt needs to be submitted to avail a loan against FD
    Penal Interest Rate Penalty for pre closure Margin Repayment Period
    - - Up to 90% of overdraft against FD Contact the bank

    Deutsche Bank Loan Against FD - Features

    • Besides your own FD, you can avail loan against FDs held by any of your family members
    • The interest on the loans are charged only on the utilised amount
    • Competitive interest rates
    • Loans up to 95% of your FD can be availed.
    Penal Interest Rate Penalty for pre closure Margin Repayment Period
    Not applicable Nil Up to 90% of overdraft against FD Contact the bank

    Eligibility Criteria for Availing Loan Against Fixed Deposit

    To be eligible for a loan against FD, the basic criteria is that you must hold a fixed deposit with the bank you are availing the loan from and any of below-given individuals/entities can avail the loan:

    • Resident Indian citizens
    • Family Trusts
    • Hindu Undivided Family (HUF)
    • Clubs, societies, and associations
    • Sole proprietorships, group companies, and partnership firms

    Documentation Required to Avail Loan Against Fixed Deposit

    To avail a loan against fixed deposit, you will need to provide the below-given documents:

    • Application form duly signed
    • Duly signed agreement
    • Fixed/Term Deposit receipts duly discharged in favor of the bank

    Please note that these may vary from lender to lender.

    How to Obtain Loan Against Fixed Deposit

    Most lenders allow you to avail a loan against fixed deposit online except in few cases where you will need to visit the nearest branch of the bank. Some of the banks that offer the facility of availing a loan against fixed deposit online through their respective websites are the State Bank of India, HDFC Bank, Axis Bank, and Deutsche Bank. In the case of Federal Bank, you will need to visit the nearest branch of the bank.

    Features and Benefits of Loan Against Fixed Deposit

    • Lower interest rates – Since your fixed deposit acts as a security for a loan, the interest rate charged on these loans are lower. The interest rates on these loans are usually lower than the interest rates on personal loans by about 2% to 2.5%. Hence, the equated monthly instalments (EMIs) on these loans are also lower.
    • Minimal paperwork – Since banks already have your details which you furnished during the opening of your FD, the documentation required for availing the loan against your FD will be minimal. You will not be required to submit documents such as your proof of income, Income Tax Returns (ITR), etc.
    • No credit score check – When you apply for any kind of loan, lenders will have a look at your credit score before they offer you a loan. However, in the case of a loan against FD, your CIBIL or credit score will not be considered while evaluating your eligibility. Hence, such loans can be a good option for people who have low or no credit score.
    • The loan amount will depend on the FD amount – If you have to avail a personal loan, the maximum loan amount that you can avail will depend on various factors such as your credit score, income, tenure, etc. However, in the case of loan against FD, the maximum loan amount will depend on the money you have invested in the FD account. This means that if you have invested a higher amount in your FD, you will be eligible for a higher loan amount.
    • No prepayment penalty – When you prepay any loan, the banks lose out on the interest and hence, they will charge you a penalty for the same. However, in the case of a loan against FD, no penalty is charged as banks do not lose out on the interest amount. Instead, they profit from it as they do not have to pay you any interest on the loan amount.

    FAQs on Loan Against Fixed Deposit

    1. Can I get a loan against my FCNR deposit?

      Yes, you can obtain a loan against your Foreign Currency Non-Resident Account (FCNR) deposit from banks such as HDFC Bank, ICICI Bank, etc. Loans can also be availed against your NRE and NRO deposits.

    2. What happens if I am unable to pay the EMIs towards my loan availed against my FD?

      In instances where you fail to pay the EMIs, the bank will use the amount in your FD to adjust the payment against your loan availed.

    3. Can minors avail loan against fixed deposits?

      No. To avail loan against a fixed deposit, you need to be at least 18 years of age and hold a valid fixed deposit.

    4. I have availed a loan against my FD. Is it possible to close my FD before my loan tenure ends?

      You are not allowed to close your fixed deposit if there is an outstanding overdraft against it.

    5. I want to avail a demand loan against my FD from SBI. Can I do it online?

      Unfortunately, no. At the moment, SBI allows online facility only for overdrafts. If you wish to avail a demand loan, you will have to visit the nearest branch of SBI.

    6. My husband and I hold a joint account in SBI. Can we avail the overdraft facility against our FD?

      Yes, joint account holders can avail the overdraft facility against fixed deposit by visiting the nearest SBI branch.

    7. I hold an NRO deposit in ICICI Bank. How do I repay the loan I have availed against my deposit?

      The repayment for the loan availed against your NRO deposit from ICICI Bank can be made by adjusting the FD or making fresh remittances through the usual banking channels, from outside India. Repayment can also be made out of the funds in your NRO account.

    8. What is the minimum loan amount that I can avail from SBI against my FD as an overdraft?

      To avail an overdraft facility from SBI against your FD, the minimum amount should be Rs.25,000.

    9. Can I avail an online overdraft facility against my tax saving deposit in SBI?

      Unfortunately, SBI does not offer overdraft facilities on tax saving deposits and recurring deposits.

    10. What is the overdraft limit on FCNR deposits in HDFC Bank?

      You can avail an overdraft of up to 70% of the deposit amount in your HDFC FCNR deposit.

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