Process of Taking the Personal Loan Against Fixed Deposit

When it comes to fixed deposits, it would not be wrong to say that they are  one of the most common saving schemes, easily available for an average investor. Moreover, fixed deposits give a higher rate of interest as compared to savings bank account. But, one thing that needs to be mentioned here is the fact that facilities may vary from bank to bank. Yes, some of the facilities offered by banks are overdraft loan facility on the deposited amount, premature withdrawal before the maturity period and many more.

However, one thing that needs to be mentioned here is the fact that a sudden requirement of cash can sometimes lead you into selling your assets. Moreover, if used smartly, there is no denying on the fact that fixed deposits can do wonders for you. Yes, there are many lenders or banks available these days that offer personal loan against fixed deposits, wherein you can easily raise short-term money without harming your fixed deposit.

More to the point, another benefit being offered to you is the lowest interest rate as compared to conventional personal loans. Yes, if you are going to take a personal loan usually, it is being offered to you with a higher rate of interest. Being an unsecured loan, personal loan is available with high interest rates, so you need to be prepared. But as mentioned earlier, if you take this loan against the fixed deposit, the interest rates are less because you are taking it against your FD, and it is there as a security.

People Also Look For  What are the Advantages of a Loan on a Fixed Deposit?

Reasons to Avail Personal Loan Against Fixed Deposit

  • Many banks provide personal loan to individuals usually at high interest rates, ranging between 12% to 22%. Yes, because being an unsecured loan, personal loan comes to you at higher rate of interest.
  • Whereas a personal loan taken against the fixed deposit comes to you at low interest rates as compared to conventional loans.
  • With lower interest rates comes to you the benefit of getting the higher loan amount. And, if you have a long history with the bank, it would be more convenient for you to avail the higher loan amount.
  • In traditional personal loan process, the bank has no security from your end, whereas in case of personal loan against fixed deposit, the bank has the security in the form of your fixed deposit.
  • Not only this, obtaining the personal loan against fixed deposit is generally easy and the process won’t take much time of yours.
  • There is no prepayment penalty charged by the bank or lenders, if somehow you failed the repayment of personal loan against FD.
  • However, a small processing fee is being charged by the bank, if you avail this type of loan. But, if you maintain a fruitful relationship with your bank, you might get the benefit of half fees waiver from your respective bank.
  • Many banks not even charge in case of foreclosure for personal loan against fixed deposit.
  • In case of emergency this type of loan offers you instant liquidity by keeping your fixed deposit secured.
  • Another benefit you get is the flexibility for loan repayment with no deadlines and terms.
People Also Look For  Personal Loan Vs. Loan against Fixed Deposit: Which is the best?

Personal Loan Against Fixed Deposit Benefits

Attractive Interest Rates

Well, one of the biggest benefits of taking loan against fixed deposit is the fact that it offers you attractive rate of interest as compared to others. The rates are lower, so it will affect affect your EMIs as your monthly installments will be lower. This will create a big impact on your monthly budget, thus taking a loan against fixed deposit is surely a beneficial thing.

Earn Interest

The best thing about taking a loan against fixed deposit is the fact that you will continue to earn the interest on the deposit. Yes, just because you have availed a loan against it, the lenders will give you the interest on the same. So it’s a win-win situation for you.

Loan Against FD Documents Required

A personal loan against FD is easy to obtain and the process generally takes less than one day. To avail this facility, you need to submit a duly-filled application form, fixed deposit receipts and other documents such as pledge/lien letter and overdraft agreement as notified by the bank.

People Also Look For

Leave a Reply

Your email address will not be published.

Personal Loan Interest Rates September 2023
Fullerton India12.00% - 24.00%
HDFC Bank10.75% - 14.50%
ICICI Bank10.75% - 19.00%
IndusInd Bank10.25% - 26.00%
Kotak Bank10.99%
RBL14.00% - 23.00%
Standard Chartered Bank11.49%
Tata Capital10.50% - 24.00%
Home Loan Interest Rates September 2023
Axis Bank8.75% - 9.15%
Bank of Baroda8.50% - 10.60%
Citibank8.75% - 9.15%
HDFC8.50% - 9.40%
ICICI Bank9.00% - 9.85%
Indiabulls Housing Finance Limited8.65%
Kotak Bank8.85% - 9.40%
LIC Housing8.50% - 10.50%
Piramal Capital & Housing Finance10.50%
PNB Housing Finance8.50% - 10.95%
Reliance Home Finance8.75% - 14.00%
State Bank of India/SBI9.10% - 9.65%
Tata Capital8.95% - 12.00%