The Buyt Desk
Coronavirus pandemic has played havoc on our finances. Cities are under lockdown, streets are empty, health infrastructure is crumbling down and people are losing jobs. Data from the Centre of Monitoring Indian Economy (CMIE) showed that 73.5 lakh people have lost their jobs due to the second wave of coronavirus. In a situation like this, a sudden requirement of money could arise for anyone. The easy way out is to get a personal loan. Lots of banks offer this instant personal loan which is approved instantaneously. But they do come at a cost. The interest rate on these personal loans ranges anywhere between 16-20%. But if you have a Fixed Deposit (FD) in a bank this could come to your rescue. You need not break the FD prematurely but can avail of a short term loan against your FD.
What is the benefit of taking a loan against FD?
You can take a loan against your FD. The interest on a loan against FD is also much lower as compared to a personal loan. Many banks are currently giving loans at less than 6% interest on FD. Taking a loan against FD is much cheaper than a personal loan. You can take a loan by paying only 1 or 2% more than the interest on FD. Currently, the returns on bank FDs range from 4 to 6%. In that scenario, you can get a loan at an interest rate of 6-8 per cent. However, don’t forget that the loan amount will be decided based on the value of your FD. That means you can take a loan up to 90-95% of the value of FD. For example, if the price of your FD is Rs 4 lakh then you can get a loan of up to Rs 3.5 lakhs.
How to get a loan against Fixed Deposit?
You can also apply online for Loan Against Fixed Deposit. Most banks have given this facility online. Apart from this, it can also be applied by going to the bank branch. The good thing is that it is a secured loan because you pledge your FD as security thus banks also do not hesitate in giving this loan.
Top 5 Banks and the rate at which you will get the loan
|
Bank |
Rate of Interest |
Loan Value |
|
State Bank Of India |
1% above the FD rate |
Up to 90% of FD value |
|
Punjab National bank |
1% above the FD rate |
Up to 95% of FD value |
|
ICICI Bank |
2-3% above the FD rate |
Up to 90% of FD value |
|
HDFC Bank |
2-3% above the FD rate |
Up to 90% of FD value |
|
Axis Bank |
2 % above the FD rate |
Up to 85 % of FD value |
Credit card Against FD
You can also apply for a credit card against your FD. Apart from a loan against your FD, you can also avail the facility of taking a credit card against FD. This credit card will have a credit limit ranging from 75- 85% of the value of the FD. But you must have an FD of at least Rs 25,000 to avail the facility of a credit card.
