Loan Against FD - IndusInd Bank

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.

What is the IndusInd Bank Loan Against FD?

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. 

Features of the Loan Against IndusInd Bank Fixed Deposit

• There are two types of loans that the bank will give you over your fixed deposit: the overdraft facility and the regular loan. 
• The interest over the loan will be higher than the fixed deposit by 2%.
• There are no processing fees - when you want to take a loan against your fixed deposit from IndusInd Bank.
• There is a 90 to a 95% limit on the amount that you can borrow. It means you can borrow up to 90% to 95% of the FD value that you hold in IndusInd Bank.
• There are also no prepayment charges when you want to close your Fixed Deposit account beforehand.

Benefits of the Loan Against IndusInd Bank Fixed Deposit 

• Low-interest rates: The interest rate charged by IndusInd Bank is 2% more than the interest rates for fixed deposits. These interest rates are considerably lower than those on other loans that banks are offering simultaneously.
• Prepayment costs and processing fees not charged: Loans secured by FD are not subject to prepayment fees or processing fees.
• No need to break your fixed deposit: If you need money immediately during a cash crunch, you can borrow against your fixed deposit without breaking it.
• There is no processing fee: Since you are already a bank customer, you will not have any processing fee or tedious procedure to follow to get the loan against your fixed deposit.
• It is better than a personal loan: This option is wiser than taking a personal loan since you would be approved easily, and there are no extra charges on the loan. Moreover, the EMIs and other options will be reasonable since they have been borrowed against an FD.
• You will not have to break the FD: When you have sudden monetary needs or financial crunches, you will not have to break the FD, and the FD will keep earning interest while you repay the loan until the tenure of the FD.
• You can take a longer period: When you have a long-term fixed deposit with the bank, you can choose to repay the loan slowly, at lower EMIs, over a longer period of time.
• The greater your investment, the larger the loan amount is available: Since you can take up to 90% of your fixed deposit, you can take a larger amount when you have invested more in the fixed deposit.

What is the Eligibility of the Loan Against FD from IndusInd Bank?

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.

Limitation of the Loan Against FD

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.

Tenure of the Loan Against an FD from the IndusInd Bank

There is no additional tenure associated with a loan against FD. The maximum loan term is equal to the term of your fixed deposit.

FAQs

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.