During any financial emergency, availing of a loan can be one of the quickest modes of financial aid. However, getting a loan is not easy. Lenders have a detailed eligibility criteria which must be fulfilled to get a loan. In such a case, if you have a Fixed Deposit (FD), you can apply for a loan against FD. To get a loan against your FD, you don’t need to have an excellent credit score or monthly income. The interest rate on such loans vary from 1% to 2% above the FD rate and repayment tenure can be up to 60 months.
|Loan amount||Up to 90% of principal and accrued interest|
|Rate of interest||1% to 2% above the FD rate|
|Repayment tenure||Up to 60 months|
|Security||Collateral security of fixed deposit|
|Nature of facility||Demand Loan and Overdraft facility|
Key benefits of loan against FD are mentioned below:
Here are some of the top banks that offer loan against fixed deposit:
|Cheque book issuance||Rs. 100 + GST|
|Penal Interest||2% p.m. + GST|
|Clearing cheque return-Issued by Customer||Rs. 500 to Rs. 750 + GST per instance|
|Clearing cheque return-deposited by Customer||Rs. 100 + GST|
Below are some loan against fixed deposit disadvantages:
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Individual customers holding TDR/STDR/e-TDR/e-STDR with SBI in a single name only can avail the facility online. Joint account holders can avail the facility at the branches. At branch level loan is also sanctioned against the security of RD/NRE/NRO/RFC and FCNR(B) deposits.
The deposit against which the loan will be availed has to be offered as collateral security to the bank. Lien will be marked on the deposit in favour of the bank and custody of the fixed deposit receipt duly discharged will be with the bank.
At present, the online facility is restricted to Overdraft only. For availing Demand Loan, the customer has to visit the branch.
Overdraft facility up to 90% of the value of STDR/e-STDR and up to 75% of the value of TDR/e-TDR can be availed on the internet platform. At branch level, you will be able to avail 90% of the underlying security as either Overdraft facility or Demand Loan.
Interest will be charged at 1% above the relative time deposit rate.
The maximum Overdraft limit that can be availed against the fixed deposit is 5 Crores, if availed online. There is no specific limit for advances at the branch level.
The minimum loan amount is 25,000 if the overdraft facility is availed online. There is no specific minimum limit for advances at the branch level.
For availing overdraft facility online, customers holding TDR/STDR/e-TDR/e-STDR in with SBI in a single name are only eligible. If the Overdraft facility has to be availed jointly, the joint account holders have to visit SBI branches for availing the facility.