When faced with a sudden financial crisis, most people end up liquidating their assets, including fixed deposits. This action can help you get through a rough patch, but it also defeats your investment goal. An alternative to the liquidation is Loan Against FD IndusInd Bank.
This kind of loan doesn't have processing fees and offers flexible repayment options, including monthly installments and lump sum payments. These loans have very competitive interest rates that are higher than those on fixed-rate deposits.
Additionally, you can continue to get regular returns on your deposit while the investment is still in place.
If you need to borrow money because of a financial emergency, you can use your fixed deposit as security. Loans secured by FDs are available from IndusInd Bank with no processing costs. You don't have to terminate your FD to obtain a loan. The FD from IndusInd Bank will be used as collateral for the FD account holder.
Anyone with a fixed deposit, whether they hold it alone or jointly, is eligible for this borrowing program. Your occupation, monthly income, and credit history are only taken into account if you apply for the overdraft facility and are simply secondary factors here.
However, a deposit is not eligible for the loan facility if it is made in a minor's name or was made to save taxes.
There is a set credit limit for loans carried out against fixed deposits. The amount placed into your account directly affects how much you can borrow in loans. Banks often only approve 90 to 95 per cent of the FD amount as a loan.
There is no additional tenure associated with a loan against FD. The maximum loan term is equal to the term of your fixed deposit.
Q1. What options are there for taking out a loan against FD?
You can take out a standard loan or use the overdraft facility to borrow money against your future dividends.
Q2. What is the exact interest rate for an FD loan from IndusInd Bank?
Your fixed deposit's interest rate is 2% higher than the interest rate on loans secured by FDs.
Q3. Is a loan against FD permitted on a fixed deposit account registered in a minor's name?
No, a loan against a fixed deposit held in a minor's name is not permitted.
Q4. What is the processing charge for a loan against an FD from IndusInd Bank?
For loans secured by FDs, IndusInd Bank doesn't charge a processing fee.
Q5. Is there a prepayment penalty for the loan against FD from IndusInd Bank?
The loan against FD from IndusInd Bank does not have a prepayment penalty.
Q6. Is a loan against FD better than a personal loan?
Yes, it is a better option than taking a personal loan since the interest rates are low, and there are no high charges.
Q7. How many years can I take to repay the loan against my fixed deposit?
You can choose to repay the loan until the maturity date of your fixed deposit in IndusInd Bank. This is because the fixed deposit from the bank will act as the collateral for the loan you borrow from the bank.
Q8. Can I apply for the loan against FD offline?
Yes, you can visit the bank directly to do so.