₹10,000 - ₹25 Cr
Loan of up to 80% of policy value| Funding against policies under lock-in period
Overview
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How does it work?
When you apply for a loan against FD, your fixed deposit serves as security for the borrowed amount. The loan value is usually a percentage of your FD, often up to 75% while the remaining portion of your deposit continues to earn interest until maturity. Once the loan is fully repaid, your fixed deposit is released back to you. Since it’s a secured loan, approval is usually quick, and the entire process can be completed online with minimal paperwork.
1. Interest rates and charges
One of the biggest advantages of a loan against fixed deposit is the comparatively low interest rate. Because the FD serves as collateral, the lender’s risk is reduced which translates into better terms for the borrower. Here is what you should keep in mind:
- Interest rates are usually 2% higher than your FD rate.
- Processing fees are minimal or sometimes even waived.
- No prepayment penalties in most cases, giving you repayment flexibility.
It is still wise to compare offers across lenders to ensure you’re getting the most cost-effective deal.
2. Tenure and repayment flexibility
The tenure of a loan on fixed deposit is usually tied to the remaining maturity period of your FD. You can opt for a shorter tenure with higher EMIs or extend it to keep your instalments light. Choosing the right repayment plan helps you balance liquidity and affordability. Make sure your EMIs align with your monthly income to avoid unnecessary financial stress.
3. Emergency fund considerations
Before applying for a loan against fixed deposit, evaluate whether you have an emergency fund in place. If you already maintain one, you may not need to borrow for smaller expenses. However, if your emergency fund is insufficient, this loan can be a safe backup for quick liquidity. Being financially prepared ensures you don’t have to break your FD or rely on high-interest loans during urgent times.
Benefits of a loan against fixed deposit
A loan against securities like fixed deposits offers multiple advantages for borrowers who value both safety and convenience:
- Instant access to funds without breaking your FD
- Low interest rates compared to unsecured loans
- No impact on credit score since it’s a secured facility
- Flexible repayment options to suit your needs
- Continued interest earnings on your FD balance
Conclusion
How to Secure a Rs. 2 Crore Loan Against Securities Instantly
A loan against fixed deposit is one of the most reliable and cost-effective ways to access funds without disturbing your savings. It offers low interest rates, flexible repayment options, and continued earnings from your deposit making it an ideal choice for both planned and unexpected financial needs. By borrowing responsibly and comparing options wisely, you can make the most of your loan against FD and maintain financial balance even in times of urgency.
Unlock liquidity while your savings keep growing. Apply for a loan against fixed deposit today and stay financially confident.
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Frequently Asked Questions
General
What is a loan against fixed deposit and how does it work?
A loan against fixed deposit allows you to borrow funds by pledging your FD as collateral instead of prematurely closing it. The lender provides a loan based on the eligible value of the deposit. You repay the borrowed amount with applicable interest while the FD continues according to its terms.
How much can I borrow against my fixed deposit and what interest rate is charged?
The amount you can borrow against an FD depends on the lender's policy and the value of your deposit. The applicable interest rate also varies by lender and loan terms. Check the lender's current eligibility criteria, loan-to-value ratio, interest rate and applicable charges before applying.
What are the benefits of taking a loan against FD instead of breaking the fixed deposit?
A loan against FD can help you access funds without prematurely closing your fixed deposit. This allows the deposit to continue according to its terms while providing liquidity for financial needs. It may also offer a simpler application process and potentially lower borrowing costs than some unsecured loans.
How do repayment tenure, interest charges and FD maturity affect a loan against fixed deposit?
The repayment tenure determines how long you have to repay the loan, while interest charges affect the overall borrowing cost. The FD's maturity date can also influence the loan arrangement and repayment requirements. Before borrowing, review the lender's tenure, interest rate, charges and FD-related terms.
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