Loans against fixed deposit

Loan against fixed deposit is a secured loan that gives you the liberty to pledge your deposit as collateral in return for the loan amount. Most individuals break their FDs before maturity in case of emergencies. This in turn results in loss of interest and hamper your investment plans.

What will you need to apply for a loan against FD

Before you apply for a loan against FD, you need to consider certain factors.

  • Fixed deposit: Since this loan option is secured against a FD, it is a primary necessity for you to have a FD account in the first place. For those unaware of the term, fixed deposits are sums of money invested in an account that earns interest over a tenor.
  • FD with same value as your loan amount: It is necessary for your FD to be of the same value as the loan you are borrowing. For example, for those borrowing a loan of Rs.1 lakh, their FD would have to be of the same value, or greater.
  • Other investments: The loan against FD can work better for you if you have multiple investments. If you just have a single FD that generates cash, it would be risky to put that FD at stake. Hence, before you apply, make sure you have various investments that are yielding good returns.
  • The tenure has to match: The tenor for FDs is the period over which the investment matures. A tenor for a loan against fixed deposits is the period over which you have to repay the loan amount. The tenor for your FD has to be the same as your loan tenor, and you have to repay the loan within the maturity duration of your fixed deposit.
  • Clearing the eligibility criteria and application formalities: To apply for this option, like all other options, you have to match the eligibility criteria. You also have to go through all the application procedures and submit basic documentation.

What are the benefits of loan against fixed deposit?

  1. High loan value: In case of cumulative fixed deposits, you can avail a loan up to 75% of the amount you’ve invested. You can get a loan up to 60% of the amount invested in non-cumulative FDs.

  2. No additional charges: With no extra charges for foreclosure or part-prepayments, you can fulfil your financial needs easily.

  3. Minimal documentation: Get guaranteed approval, with just a single page documentation.

What is the minimum amount to be invested in a fixed deposit?

There is no mandated amount for minimum investment. Rather, the minimum amount varies from one financial institution to another. For example, in the case of Bajaj Finance Fixed Deposit you can invest with a minimum amount of Rs 25,000 without waiting for a larger corpus.

How to apply?

  1. Fill the online application form and deposit the money via net banking, RTGS/NEFT or cheque.

  2. Access your filled-out form by clicking on ‘Save as PDF’. Our representative will get in touch with you for document collection

  3. Print and sign your application form, affix your photographs, and keep your KYC documents ready

  4. Submit the documents with a CTS compliant cheque to the representative.

What are the features and benefits?

Unforeseen events or emergencies warrant immediate cash flow, and that is why some investors may consider liquidating their fixed deposit investments before maturity. However, you can tend to emergencies without breaking your FD, by taking a loan against fixed deposit as collateral, in return for the loan amount

Bajaj Finserv offers easy loan against fixed deposits at lower interest rates, with quick processing, flexible repayment options and minimal documentation.

Who can apply?

The following Bajaj Finance Limited FD holders are eligible for a Loan Against Fixed Deposit:

  1. Resident citizens of India

  2. Hindu Undivided Family

  3. Sole proprietorships, partnership firms, and companies including group companies

  4. Clubs, associations, and societies

  5. Family trusts

Are there any fees or charges?

With Bajaj Finserv Loan against fixed deposit, you need not worry about any hidden fees or charges.

Here are more details on the fees and charges:

  • NIL charges on part pre-payment

  • NIL charges on foreclosure

On the bright side, there are no foreclosure or part pre-payment charges applicable on your loan against FD.

Which interest payout options are available?

Bajaj Finance Limited offers cumulative & non-cumulative interest payment options.

  • In a non-cumulative fixed deposit scheme, the interest is payable on a monthly, quarterly, semiannually and yearly basis. This scheme will be convenient if you require periodical interest payment.
  • In a cumulative term deposit scheme, the interest is payable at the time of maturity along with the principal and is compounded annually. This scheme is suitable for an individual who does not require periodic interest payment and acts as a money multiplier scheme. The interest will be compounded annually and the final payout will be subject to deduction of tax, wherever applicable.

Why choose Finserv MARKETS?

With Bajaj Finance, you need not break your fixed deposits to fund immediate financial requirements. You can avail a loan against FDs, which helps you get your money within just 24 hours. A loan against fixed deposit enables you to fund your financial needs easily, without having to break your FD investments.

Bajaj Finance Fixed Deposits enable you to grow your savings and ensure easy liquidity, so that you can use them as emergency funds as well. With a simple loan against your Fixed Deposits, you can look for greater flexibility and stable returns too.

A loan against fixed deposits is easier to obtain. It can help you save your money and you can avail this loan in less than a day, by simply filling up an application form. It helps you streamline your finances better and avoid bearing the loss of interest rate on your FDs, when you break them.

What is the rate of interest on your loan against fixed deposit?

The rate of interest on your loan against fixed deposit is 2% more than the prevailing FD interest rates.

Why does the rate of interest on fixed deposits vary?

There are certain factors that affect the rate of interest on a fixed deposit. Interest rates usually increase if India’s GDP is on the rise. The converse also applies. Additionally, the Reserve Bank of India (RBI) changes its monetary policy according to existing market variables like inflation or recession. If there are inflationary conditions, then RBI hikes repo rates, allowing banks to provide increased interest rates to depositors. This helps to stave- off rising costs, as a higher interest rate prompts more savings. Conversely, if there are recessionary conditions, RBI decreases the repo rates, with a corresponding decrease in the interest rates being provided by banks. When the rate of interest is lowered, it prompts any individual to borrow and spend more. Other factors that impact the rate of interests are the existing liquidity scenario along with the demand and supply situation.

To sum it up, why you should take a Bajaj Finserv Loan Against FD?

  1. Enjoy easy application and quick processing

  2. Ease your repayment with a nominal interest rate

  3. Avail the loan with minimal paperwork

  4. Get access to a substantial loan amount

  5. Rest assured with no hidden charges

  6. Make the most of repayment flexibility

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