In this article we are going to cover what is loan against fixed deposit and some of the underlying facts about it.
Loan against fixed deposit is a secured loan and usually banks give up to 90% of the money deposited. Rate of interest on loan will be 1 or 2% above the deposit interest rate. The period of loan will be up to the date of maturity of the deposit. In some cases, loan against deposit can be considered only after completion of certain period and this varies from banks to bank. In case, depositor is a minor, loan against deposit will not be considered. If you have already availed credit card against your deposited money, loan amount will be restricted or in some cases it will be denied.
Most banks will not charge any processing fee. Interest rate will be very low as compared to traditional personal loans. Application process will be simpler and doesn’t mater even if your CIBIL score is low. In order to avail the loan, you have to visit the branch and fill up the application for loan against deposit.
SBI, HDFC Bank, Bank of Baroda, ICICI Bank, Citi Bank, PNB, Axis Bank, Kotak, Au small finance bank and Bajaj Finserv Ltd are offering this service.
You can also refer to other fixed deposit articles here.
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