A fixed deposit (FD) is one of the safest ways to grow your savings with assured returns. But when you need substantial funds, breaking the FD is not the only option. Many banks and financial institutions offer a Rs. 30 lakh loan against your FD, allowing you to meet financial needs without disrupting your investment.
How a loan against FD works
A loan against FD is a secured loan where your deposit acts as collateral. The lender marks a lien on your FD, meaning it stays intact and continues to earn interest while you borrow against its value. The loan amount can be as high as 90% of the FD value, depending on the lender’s policy.
Benefits of a Rs. 30 lakh loan against FD
Retain your investment
Your FD remains active and continues to generate returns at the agreed rate.
Lower interest rates
Since the loan is secured, the interest rate is usually 1–2% higher than the FD rate, making it more affordable than unsecured loans.
Quick approval
With minimal documentation and pre-existing relationship with the bank, funds can be disbursed quickly.
No credit score dependency
Approval is based on your FD, so even borrowers with low or no credit history can qualify.
Eligibility and documents required
To apply for a Rs. 30 lakh loan against FD, you must:
- Hold an active fixed deposit with the lender.
- Meet the minimum FD amount requirement set by the lender.
- Provide identity proof, address proof, FD receipt, and a signed loan agreement.
Repayment flexibility
Loan tenure generally matches the FD maturity date. You can repay through EMIs, bullet repayment, or in a lump sum before maturity. Many lenders also allow prepayment without penalties, offering financial flexibility.
Example scenario
Suppose you have an FD worth Rs. 35 lakh earning 6.5% interest annually. You could get a Rs. 30 lakh loan at around 8% interest without breaking your FD. While your FD continues to earn returns on the full Rs. 35 lakh, you can use the loan to fund business expansion, property purchase, or emergency expenses.
Things to keep in mind
If you fail to repay the loan, the lender can recover dues by liquidating your FD. Also, if the FD value falls below the required margin, the lender may request part repayment.
Conclusion
A Rs. 30 lakh loan against FD is a smart way to access high-value funds without sacrificing your investment’s returns. With competitive rates, quick processing, and flexible repayment, it’s a reliable choice for large financial requirements.
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