If you have instant cash requirements and you are facing difficulties in approval for the loan due to musltiple reasons like a lower CIBIL score, lower income and others, then, you have other options like getting a loan against FD. However, there are ceratin limitation, like amount is approved based on the fixed deposit, i.e., the final approval is done upto 70 to 90 % of the Fixed deposit. Before, applying you must check the amount saved as FD and you can also consult your bank or branch. However, it might be easier if you are using mobile banking application, where all the services including banking, credit card dealing, investment, and loan are done through a single platform. With such things, you can get a personal loan against your savings.
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Steps to Apply for a Loan Against Fixed Deposit (FD)
The Loan Against FD is an easy way to get funds without breaking your fixed deposit and once you have repaid the loan amount as per the selected tenure, you can continue your FD as it is. Some steps to apply for the loan are as follows.
Check Eligibility: Before proceeding with the loan application, you must ensure that you have an active fixed deposit with the bank or financial institution where you are applying. You must check the amount as well or you can use loan against FD calculator for getting explicit idea of amount, etc.
Check the Loan Amount: The Banks generally offer 70% to 95% of the FD value as a personal loan, where you have to pay interest on the loan amount. Once it is completely paid, your FD remains operational and the same.
Submit the Loan Application: Once you have verified your eligibility and loan amount, visit the bank branch or apply through internet banking/mobile banking.
Fill out the Loan application form: As per your requirements and loan amount, fill out your application form by providing all your details, including personal and financial information.
Complete Documentation: If required, upload the documents. However, your details are already saved to the lending institutions because of your running bank account. But it can be required for the verification. Usually, minimal documentation is required, such as identity proof (Aadhaar, PAN, Passport, etc.), and the address proof (if required for the current residential verification).
Verification and Approval: Once the loan amount is approved and verification is done, you need to check the loan agreement, especially related to the tenure and other applicable fees such as interest and processing fees.
Receive the Loan Amount: Get the disbursal after the verification and approval, where the loan amount is credited directly to your linked bank account.
Repay the Loan: As per the approved tenure, repay the loan amount.
Benefits of Taking a Loan Against an FD
Considering the beneficial features like fast approval and competitively lower interest rates, the loan against FD can give assurance to the borrowers. However, it always depends on the amount, value of the FD, etc. Some specific benefits are as follows.
- Quick approval and disbursement: The loan application and approval process is fast, and depending on your loan amount, where loan amount is lower than fd, is approved easily.
- Lower interest rates compared to personal loans: Since it is considered a secured loan, where the loan is approved based on your fixed deposit, the interest rate can be lower compared to an unsecured loan.
- Minimal documentation: The minimal documentation may be required because the lender already has your personal and financial details.
- No need to break the FD prematurely: For getting a personal loan, there is no need to break your FD because a loan is available with a lower interest rate.
- FD continues earning interest: Your FD interest continues if you have borrowed against it and are paying the loan amount as per the tenure.
You can add the following Eligibility Criteria Table to your blog:
Eligibility Criteria | Details |
Fixed Deposit Ownership | The applicant must have an active Fixed Deposit (FD) with the bank or financial institution, from where they are getting the loan. |
Minimum FD Value | The loan amount is generally approved based on the FD value. |
Loan Amount Eligibility | Banks usually provide 70% to 95% of the FD amount as a loan, depending on their policies. |
Age Requirement | Applicants should meet the minimum age criteria, which starts from 18 years or above. |
Bank Account | A savings or current account with the bank can be required for loan disbursement and repayment. |
KYC Compliance | Applicants must complete KYC using valid identity and address proof, if required. |
Resident Status | Resident Indians, and in some cases NRIs, can apply subject to the lender’s policy, especially based on the property value. |
Credit Score Requirement | A high CIBIL score is generally not mandatory because the loan is secured against the FD. |
Documentation | Minimal documentation is required, such as Aadhaar Card, PAN Card, Passport, or other valid KYC documents. |
Conclusion
Getting a personal loan against property, especially the FD is always easy, especially when you are applying for the loan within the approved limit. However, the application process and approval can take a time, especially when you go for it manually. But, depending on the amount and your FD values, it is approved and disbursed easily. It helps you get the cash easily and also to maintain the FD by getting the interest continuously.
FAQs
A Loan Against FD is a secured loan offered by banks and financial institutions against your Fixed Deposit. Instead of breaking your FD before maturity, you can borrow a percentage of its value and continue earning interest on the deposit.
Most banks offer a loan amount ranging from 70% to 95% of the FD value. The exact amount depends on the lender's policy, FD type, and deposit amount.
The loan against FD interest rate is usually lower than personal loan rates because the loan is secured by your Fixed Deposit. Generally, lenders charge a small margin above the FD interest rate.
A loan against FD calculator helps you estimate the eligible loan amount, interest payable, and repayment obligations based on your FD value and lender's terms. It gives you a clear idea before applying.
Yes. One of the biggest benefits of an FD against loan is that your Fixed Deposit remains active and continues to earn interest while you repay the loan as per the agreed tenure.
Disclaimer:- This blog has been published only for informative purpose, especially for those who are willing to get the loan against FD. We are not facilitating the such types of loan. The customer willing to get a personal loan can visit our website where depending on eligibility, their loan amount is approved.
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