The low-down on Personal Loans against Fixed Deposits
A fixed deposit is a popular method of saving money for a rainy day, not just in India, but all over the world. But sometimes you may reach that point where you have no other source of money other than the fixed deposit that you’ve saved for all those years. That’s when you should consider a personal loan against fixed deposits.
For those of you looking to pledge their FDs, here’s what you need to know about loans against fixed deposits in India.
An Enticing Rate of Interest
As you may already know, personal loans are unsecured, meaning that you don’t need to provide collateral to take out one. This is the chief reason behind their high interest rates, which range from anywhere between 14% and 24%. A personal loan against fixed deposits, on the other hand, is secured with the FD that you’re pledging. Lenders usually charge an interest rate that’s around 2% to 2.5% of the FD rate.
For instance, if your FD rate is 9%, then your loan against fixed deposit interest rate will be between 11% and 11.5% depending upon the lender you choose. At Bajaj Finserv, you can take a personal loan against fixed deposit at 2% above your existing FD interest rate. And this company doesn’t charge you a single penny if you decide to prepay part of your loan or foreclose it completely.
You Get a Loan Against Fixed Deposit Facility
Financial companies offer you a loan against fixed deposits. The limit for loans is usually set at 60% to 75% of the FD’s value. The best part is that you get charged on only the amount you choose to withdraw from the account. For instance, if you’ve taken a loan against your FD of INR 1,00,000, then you’ll be given a loan limit of INR 60,000 to INR 75,000.
Now if you use only INR 30,000 from your loan account, then you’ll be charged an interest only on that amount, for the duration of the time you’ve borrowed it. So if you withdraw INR 30,000 on the 1st of the month and repay it by the 13th, you’ll essentially be paying the interest for just the 13 days that you’ve used the money. This is one of the reasons why loans against fixed deposits are so popular amongst those seeking some extra cash flow.
If you’re looking to overcome a liquidity crunch yourself, then consider the Loan Against Fixed Deposit facility offered by Bajaj Finserv. With flexible repayment options, this company provides a loan amount that’s either 75% of the cumulative FD amount or 60% of the non-cumulative fixed deposit.
Once you fill in the single-page application form, your loan amount will be quickly disbursed. You can take a loan against any FD that you have at Bajaj Finserv, but only if it’s been more than 90 days since you opened the account.
A loan against fixed deposits can help you raise short-term funding for those critical times. And while applying for the loan, it’s important to select a trustworthy lender who can fulfil your expectations.