During a cash crunch or financial emergencies one can opt for a loan against their fixed deposit investment, without breaking the FD. With a loan against fixed deposit, you can use your FD as collateral to secure the loan amount. For such a loan, the CIBIL score is not checked; the loan is given on the basis of existing fixed deposit.
Who can avail loan against FD
- Resident citizens of India
- Hindu Undivided Family (HUF)
- Sole Proprietorships, Partnership Firms,
Below are the features of loan against FD as per SBI website:
- Avail Loan up to 95% of the value of your Time Deposit
- Both Demand Loan and Overdraft Facility as per your need
- Low interest rates. Further, we charge interest on a daily reducing balance!!
- Zero processing charges;
- No prepayment penalties.
- Min mount of Loan (For Online Overdraft against Fixed Deposit) : Rs 5000
- Max mount of Loan (For Online Overdraft against Fixed Deposit): Rs 5 Crore
- Margin : Avail loan up to 95% of your Time Deposit value
- Security Lien on underlying Time Deposit
- Type of loan : Demand Loan& Overdraft
- Channels : Internet Banking/YONO/Branches
- Processing fee: NIl
- Interest Rate: 1% above the relative time deposit rate
Eligibility to avail loan against FD
SBI customers with single, joint account holders holding SBI’s TDR/STDR / RD / including NRE/NRO/RFC and FCNR(B) deposits can avail this loan. Single account holders can also avail overdraft against deposits online.
In SBI, the maximum overdraft limit that can be obtained online in exchange for fixed deposits is Rs 5 crore. The Branches do not have any set loan limits for advances.
How much loan can be availed on FD
Banks offer loan against fixed deposit by charging some interest and amount will range from 75% to 90% depending on the bank.
How to avail loan against FD in SBI?
Step 1: Login net banking
Step 2: Select the e-Fixed Deposit option from the menu section.
Step 3: Select the option for “Overdraft against Fixed Deposit”.
Step 3: Select one of the active deposits from the list and request apply an overdraft.
Step 4: Select “Proceed” and verify the overdraft amount, applicable overdraft interest rate, and expiration date.
Step 5: Enter high security password on your registered mobile number
Alternatively customers can also approach the Branch for availing the facility.