Fixed deposits have always been the favorite investment option of Indians. Due to good interest rates and no risk of drowning money, investors who avoid risk invest in FDs. Now people are also taking advantage of the loan facility available on FD Loan. The recently released bank market’s ‘Manimood’ report said that the loan on FD has increased by 16.47 percent on an annual basis. The loan on FD has increased to Rs 113.9 crore in 2023 in 2023 as compared to Rs 97.5 crore.
The loan on fixed deposits is known as a loan on FD. This is a safe loan. Almost all banks and financial institutions give loans on FDs. FD loan is available immediately. It does not require much paperwork. Yes, banks do not give loans on 5 years tax saving FD. Also, minors are not given a loan on FD. There is no processing fee for FD loan.
How much interest will be charged?
Interest rates on FD loans vary. It is usually more than 0.75% to 2% than the interest rate on FD. The interest rate is fixed in the loan option on FD, so the loan-taking interest rate is protected from fluctuations.
Loan amount
According to the money market, the loan deposits on FD can be up to 90-95 percent. Axis Bank is giving loans up to 85 percent of FD amount. Bank of Baroda is giving 90 percent loans and State Bank of India is giving loans up to 95 percent. SBI gives FD loans from 5 thousand to 5 crore rupees. However, some banks or financial institutions also require a minimum deposit amount for loans on FD. For example, Axis Bank does not give FD loan of less than 25 thousand rupees.
Soon approval
The fixed deposits are approved very quickly. This is because FD acts as a collateral. In such a case, there is no need for extensive verification of the borrower’s financial history. As a result, loans are processed with minimal documentation.
Repayment and tenure
The terms of repayment of FD loan are flexible. This loan installments (EMI) and lump sum can also be paid. However, FD has to be repaid before mature. As a result, the loan repayment period is fixed, which facilitates the borrower to make his financial plan.
Eligibility
The person who has an FD account in the name of a bank or financial institution can take an FD loan. NRIs can apply for civilians, family trusts, Hindu undivided families (HUFs), clubs, societies, associations, group companies and partnership firm FD loans.
