1 min read
25 May 2021

Fixed Deposits (FDs) offer secure and guaranteed returns, allowing you to multiply your money faster than a savings account. However, making a premature withdrawal in times of need can result in you losing out on returns and paying a penalty charge. So, instead of prematurely withdrawing your FD, you can avail of a Loan Against a Fixed Deposit from Bajaj Finserv. Not only will your FD remain intact, but you can also benefit from a high amount in your account within a day.

There are plenty of benefits to avail of from a loan against your FD. Read on to find the answers to questions that you may have about this finance option.

How to avail of a loan against FD?

Bajaj Finserv makes availing of a loan against your FD an easy and hassle-free process. You get the required funds instantly and without any risk. All you need to do is submit an application form along with your fixed deposit receipt. If you have a non-cumulative FD, you must also submit an ECS mandate and a cancelled cheque.

How much can be availed of as a loan by pledging your FD?

If you have a non-cumulative fixed deposit, you can avail of up to 60% of the value of your FD as a loan. This amount is higher, at 75%, if you hold a cumulative FD.

How soon can you receive funds, and what is the cost of borrowing?

The loan is processed within 24 hours and disbursed straight to your bank account. Besides, you don’t have to worry about high interest rates. You only have to pay 2% above what you are receiving as interest on your investment.

What are the eligibility criteria to apply for a loan against FD?

To be eligible to apply for a loan against a fixed deposit (FD), the following criteria must be met:

  1. Resident individuals:
    • Must be a resident of India.
    • Foreign citizens, Persons of Indian Origin (PIO), and Non-Resident Indians (NRI) are not eligible.
    • Applicants must be over 18 years of age.
  2. Hindu Undivided Family (HUF):
    • A Hindu Undivided Family, which is a legally recognised entity comprising lineal descendants of a common ancestor, can apply for a loan against FD.
  3. Sole proprietorship:
    • Sole proprietorships, where the business is owned and run by a single individual, are eligible to apply for this type of loan.
  4. Partnership firms:
    1. Partnership firms, which are businesses operated by two or more partners sharing profits and losses, can also apply for a loan against FD.

These criteria ensure that various types of individuals and business entities have access to financial support through their fixed deposits.

Benefits of Bajaj Finance Loan against Fixed Deposit

1. Loan amount flexibility:

  • Borrowers can avail a loan of up to 75% of the deposit value for cumulative fixed deposits and up to 60% for non-cumulative fixed deposits.
  • The minimum loan value is Rs. 3000, providing flexibility based on individual financial needs.

2. No EMI payments:

  • After obtaining the loan, borrowers are not required to make regular EMI payments.
  • The entire loan amount, along with accrued interest, can be repaid at any time before the maturity date.
  • In case of non-repayment, the outstanding amount will be adjusted from the maturity proceeds of the fixed deposit.

3. Zero foreclosure charges:

  • Bajaj Finance does not impose any foreclosure charges.
  • Borrowers have the freedom to close their loan at any BFL branch without incurring additional charges.

4. Competitive interest rates:

  • The Loan against fixed deposit (LAFD) is provided at an interest rate of 2% over FD rate, making it a cost-effective financing option.

5. Flexible tenure options:

  • Borrowers have the flexibility to choose a loan tenure ranging from a minimum of 1 month up to the tenure of the fixed deposit.
  • This flexibility allows borrowers to align the repayment period with their financial circumstances.

6. Dedicated customer portal - My account:

  • Bajaj Finance offers a dedicated customer portal, My Account, enabling borrowers to manage their loans online.
  • Features include downloading loan statements and accessing account details conveniently.

Repayment of the loan against FD Bajaj Finance

When you take out a loan against a fixed deposit (FD) with Bajaj Finance, the repayment process is designed to be straightforward and convenient. The key aspects of repayment include:

  1. Interest payments: The interest on the loan is typically deducted from the interest earned on your FD. Depending on the terms of your loan agreement, these payments can be scheduled monthly, quarterly, or annually.
  2. Principal repayment: The principal loan amount can be repaid in a lump sum at the end of the loan tenure or through Equated Monthly Instalments (EMIs). The repayment method will be clearly outlined in your loan agreement.
  3. Loan tenure: The duration of the loan is generally tied to the maturity period of the FD. It is important to ensure that the loan is fully repaid before or upon the maturity of the FD to avoid any penalties.
  4. Premature withdrawal: If you choose to withdraw your FD before it matures, the outstanding loan amount will be adjusted against the proceeds from the FD.
  5. Renewal: In some cases, if you decide to renew your FD, the loan against it may also be renewed, subject to the terms and conditions specified by Bajaj Finance.

Regular monitoring of your loan account is advised to ensure that interest and principal payments are made on time, thereby avoiding any penalties or impact on your FD.

How to apply online for a loan against fixed deposit from Bajaj Finance?

Applying for a loan against your fixed deposit with Bajaj Finance is a simple process that can be completed online or by visiting a branch. Here are the steps for the online application:

  1. Initiate application: Click on the ‘Apply’ button on the Bajaj Finance website to start your application.
  2. Sign In: Enter your mobile number and click ‘GET OTP’.
  3. Verify mobile number: Enter the OTP sent to your mobile number. After successful verification, you will be redirected to the customer service portal - My Account.
  4. Select deposit: Under “My Relations”, click on “View Details” below the FD against which you wish to apply for a loan.
  5. Apply for loan: Click on “Get a loan against FD” under “Quick Actions”.
  6. Enter loan amount: Specify the amount of loan you wish to avail.
  7. Generate OTP: Click on “Generate OTP”.
  8. Submit application: Enter the OTP sent to your mobile number and click “Submit”.

Additionally, you can visit any Bajaj Finance FD branch to apply for a loan in person. Once your application is submitted, a representative will contact you to proceed further. The final loan amount will be determined based on your investment in the fixed deposit.

What is the tenor that you can avail of a loan against FD for?

Repayment is easy with a flexible repayment window that extends up to the tenor of the fixed deposit itself, after 3 months from the start of the FD. Besides, to make repayment easier, Bajaj Finserv doesn't levy any foreclosure charges.

The most significant advantage is that even if you have availed of a loan against your FD, you will continue to get an interest on it, which means that your money will continue to grow. Check your pre-approved offer and expedite the process further.
 

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Frequently asked questions

What is a loan against FD?

A Loan Against FD is a type of loan where you use your fixed deposit as collateral to borrow money from a bank or financial institution.

Can I still earn interest on my FD while it's pledged for a loan?

Yes, you can still earn interest on your FD while it's pledged as collateral for the loan.

Is it a good option compared to an unsecured personal loan?

Compared to unsecured loans, a Loan Against FD often offers lower interest rates due to the collateral, making it a cost-effective option.

Can I get a loan against FD online?

Yes, Bajaj Finance Limited offers the option to apply for a loan against FD online, simplifying the application process for borrowers.

How do I repay a loan taken against FD?

The repayment tenure for a loan against FD varies among banks and financial institutions; but is usually short-term, ranging from a few months to a few years. The exact duration depends on the lender's policies and your agreement with them.

How much loan can one get a loan against FD?

Customers can use their fixed deposit as security for a loan against their FD (Fixed Deposit), which is a sort of secured loan. The amount of the FD deposit determines the loan's amount. This may equal as much as 75% of the deposit sum.

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