🔑 Key Features
| Feature | Description |
|---|---|
| Loan Type | Secured (backed by FD as collateral) |
| Loan Amount | Usually 80% – 90% of FD value |
| Interest Rate | 1% – 2% higher than the FD interest rate |
| Tenure | Up to the remaining FD term (cannot exceed FD maturity) |
| Processing Time | Fast – often within hours, especially if FD is with the same bank |
| Prepayment Charges | Usually no prepayment penalty |
| Credit Score | Not required (FD is the security) |
💡 Example
You have a Fixed Deposit of ₹5,00,000 earning 7% interest.
You get a loan of ₹4,50,000 (90%) at 9% interest.
You continue to earn 7% on your FD, and repay the loan with 9% interest.
Apply Loan
📋 Documents Required
No fresh KYC if FD already exists in same bank
Signed loan application form
FD receipt/certificate
Lien marking consent
✅ Benefits of Loan Against FD
🔒 FD remains intact – no need to break it
🕒 Quick processing – minimal paperwork
📉 Lower interest than personal loans or credit cards
📋 No need for income proof or credit score
🔁 Option to take it as term loan or overdraft
📆 Flexible repayment – bullet or monthly EMI
⚠️ Things to Consider
| Limitation | Why It Matters |
|---|---|
| Loan tenure tied to FD | Cannot exceed the FD’s maturity |
| FD lien | FD is lien-marked, so can’t be withdrawn during loan |
| Interest gap | You’re paying more in loan interest than FD earns |
| Not for long-term funding | Suitable only for short-term liquidity needs |
🤔 Loan Against FD vs Personal Loan
| Factor | Loan Against FD | Personal Loan |
|---|---|---|
| Collateral | Required (FD) | Unsecured |
| Interest Rate | Lower (8%–10%) | Higher (11%–20% typically) |
| Credit Check | Not required | Mandatory |
| Processing Time | Instant to 24 hours | 1–3 days |
| Loan Limit | Limited to FD amount | Based on income, credit score |