Loan Against Fixed Deposit (FD) - Interest Rates, Eligibility & Features

When we talk about investing our surplus money, Fixed Deposits (FDs) often come to mind. These traditional and highly trusted investment products are known for their hassle-free process, guaranteed returns, and ease of investment.  Did you know that you can also avail a Personal Loan against your fixed deposit? Well, you can, and it is quite simple by pledging your FD as collateral. After that, calculate the Equated Monthly Instalments (EMIs) for your loan using a Personal Loan EMI calculator. So, if you find yourself in need of financial assistance, consider exploring the option of a Personal Loan against your FD and make use of a Personal Loan EMI calculator to plan for the same. Learn more here!

What is Loan against Fixed Deposits (FD)

Loan against FDs refers to a financial arrangement where individuals can pledge their FD as collateral to secure a loan from an NBFC. You can access funds for various purposes by utilising the FD as security. The loan amount is typically dispersed in the form of an overdraft, and the interest rate charged by NBFCs is often lower compared to other types of loans. It provides individuals with a convenient and secured borrowing option for a Personal Loan against their FD investments.

How to Apply for a Loan Against FD

To apply for a loan against FD, follow these steps:

1. Ensure you have a FD account
2. Check if your FD is eligible for availing a Personal Loan against it.
3. Gather the necessary documents like ID proof, FD receipt, loan application form, etc.
4. Complete the loan application form with accurate details.
5. Submit the required documents for verification.
6. Wait for the approval and disbursement of the loan

How to Obtain a Loan Against FD?

Offline Channel:

To obtain a Personal Loan against FD through the offline channel, follow these steps:

1. Visit the branch
2. Inquire about loan against FD
3. Fill out the application form and attach the necessary documents 
4. Now verification of documents and evaluate the eligibility of your FD for a loan
5. If your application is approved, the loan will be disbursed 

Online Channel:

FD loan through the online channel involves these steps:

1. Go to the official website (https://www.herofincorp.com/)
2. Navigate to the loan section or search for the loan against FD option 
3. Provide the required information in the online loan application form
4. Upload the documents
5. Now the verification happens and once approved, the loan amount will be credited to your designated bank account or provided.

Mobile App Channel:

Through the mobile app channel, the loan application involves the following steps:

1. Download the Hero FinCorp mobile app
2. Look for the loan against FD feature within the app 
3. Fill out the application form
4. Upload the required documents
5. Following verification and approval, the loan amount will be provided

Eligibility Criteria for Availing Loan Against FD

Eligibility Criteria	Requirements
Age Criteria	Applicant should be between 21-58 years old
Minimum Monthly Income (Salaried)	Applicant should earn a minimum of Rs15,000 per month
Minimum Monthly Income (Self-employed)	The Applicant should earn a minimum of Rs.15,000 per month.
Income Proof	Six months bank statement.

 

 

What are the Documents Required for a Loan Against Fixed Deposit?

When applying for a personal loan against an FD, consider the following required documents:

1. Aadhaar card: Aadhaar card is typically the primary document required for the loan application.
2. Alternatives to Aadhaar card: If you don't have an Aadhaar card, you can provide other identification documents such as a PAN card or driving licence.
3. Professional and financial details: Along with the identification document, you will need to provide your professional and financial information.
4. Bank account statement: One of the important documents is the bank account statement. Typically, a 6-month bank statement is required to verify your financial stability.
5. Accepted banks: Ensure that your bank account is with one of the banks accepted by the financial institution offering the loan.

Features and Benefits of a Loan Against FD

Features	Benefits
Lesser loan tenure	Avoids long-term burden of repayment
Short-term loan amount	Ranges from Rs 15,000 to Rs 1.5 lakh, making repayment easier through EMIs
Instant loan approval	Quick approval with minimal documentation compared to long-term loans
Open for all borrowers	Available even for borrowers with low credit scores
Collateral-free	Unsecured loan, no need for security or asset mortgage
Paperless documentation	Online process eliminates physical document

Conclusion

Obtaining a loan against FDs provides individuals a convenient and secure borrowing option. The process is streamlined with minimal documentation, whether through offline channels, online platforms, or mobile apps. So consider exploring this option for short-term financial needs and leverage its advantages.

FAQ: 

1. Is it good to take overdraft against FD?
Taking an overdraft against an FD can be a beneficial option for borrowers. It allows you to access funds while keeping your FD intact.

2. What is the average overdraft fee?
The average overdraft fee can vary depending on the financial institution and the terms of the specific overdraft facility. 

3. Does overdraft affect credit score?
Typically, overdrafts against FDs do not directly impact your credit score. Since an overdraft against an FD is a form of secured loan, it does not involve a credit check or reporting to credit bureaus. However, it is essential to ensure timely repayment of the overdraft facility. If you fail to repay as agreed, it may result in negative consequences such as penalties, legal actions, and it can potentially impact your creditworthiness.