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Loan Against FD - Punjab National Bank (PNB)

Most banks that operate in the country offer the option of getting a loan against your FD. Given that the loan against the term deposit could be availed at a low-interest rate and will also prevent you from breaking the fixed deposit, it makes a good choice. It will assist you in saving both time and also money. 

This loan assists borrowers in obtaining money to cover their immediate financial demands, such as weddings, travel, and other expenses, in exchange for fixed deposits (FDs). 

To pay off their high-interest loans and credit card debts and consolidate their debts, this plan can also be used as a consolidation loan.

What is Loan Against FD in PNB?

When there is an urgent need for money, the first thing that comes to mind is breaking fixed deposits. However, the option is not a good one. Instead, the FD account holders can get a loan against the FD without having to break the savings scheme. The bank has the right to ask the customer to make up any gap if the minimum margin of the Fixed Deposit decreases in any way after the loan has been approved. 

Additionally, the bank may at any moment liquidate your fixed deposit to cover the loss if you are unable to repay the outstanding amount of the loan.

Loan Against Fixed Deposit in Punjab National Bank is a feature that the bank offers, and it has the following characteristics:

  • You will not lose any interest or even pay the penalty for the liquidation of the fixed deposit before maturity.
  • You are eligible for the loan at a much lower interest rate when you compare it to a personal loan.
  • The Loan Against FD PNB is only for FDs and not a certificate of deposits.
  • Loans and advances could be availed against the deposits.
  • The loan can also be extended at any branch of the Punjab National Bank.
  • The Loan Against Fixed Deposit PNB National Bank is of up to a value of 90% of the fixed deposit.
  • These loans are offered under interest rates that are given by RBI, and it is subject to change from time to time or at the rates that are prescribed by the bank.
  • For the Loan Against FD Interest Rate PNB - there is TDS applicable, and then the interest is reduced from the amount of advance or limit.

Also, check - PNB FD Interest Rates

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Who is Eligible for a Loan Against a PNB Fixed Deposit

You may apply for a loan against the fixed deposit account you've opened with Punjab National Bank by:

  1. Municipality or Panchayat
  2. Government or Quasi-government body
  3. Illiterate and blind persons
  4. An Individual 
  5. Minors at the age of 10 years
  6. Company or Corporate body
  7. Commercial organizations
  8. Partnership or Proprietorship firms
  9. Hindu Undivided Families 
  10. Charitable or Educational institutions
  11. Clubs, associations, society, and more.
  12. Trusts or religious institutions

The Period of the Loan

For loans against term deposits, the maximum loan length is three years, or the residual period, whichever is less.

How to Apply for a Loan Against an FD from Punjab National Bank?

The steps listed below must be followed if you want to apply for a loan against an FD account you opened with PNB:

  • Step 1: Access your online banking.
  • Step 2: Select "Manage Accounts."
  • Step 3: Select "Open OD Account against FD" from the Manage Accounts menu.
  • Step 4: Next, choose the FD account you want to use for an overdraft.
  • Step 5: Enter the sum you wish to borrow.
  • Step 6: Select the "Agree" checkbox next to the terms and conditions.
  • Step 7: After completing this step, the OD account number will appear on the screen under "Operative Accounts" and be viewable.

Documents Needed

  1. Two copies of each applicant's and co-passport-size applicant's photographs, duly completed and signed Loan Application Form
  2. Aadhaar, PAN, a passport, or a driver's license are examples of personal identification proof. 
  3. You must have a PAN Card or PAN Card Issuing Letter.
  4. PAN Card, Banker's Verification, Driver's License, or Passport as Signature Proof
  5. An Aadhaar card, electricity bill, post-paid phone bill, and a valid rental agreement are all acceptable forms of residential address proof.
  6. Proof of Income and Bank Account for Salaried Professionals 
  7. Last three months' worth of pay stubs, Form 16, or tax returns

FAQs

Q1. Is the loan over the Punjab National Bank fixed deposit the same as a personal loan?

No, the Punjab National Bank loan against FD is when the bank will give you a loan based on your FD holding and 90% of the entire value of the FD that you hold with the bank. A personal loan, on the other hand - will not require any collateral. Instead, it will be based on your application and various other factors.

Q2. Does the loan against fixed deposit Punjab National Bank a better option than a personal loan?

The loan against a Fixed deposit from the Punjab National Bank is a better option than a personal loan because of the below-mentioned reasons:

  • You will not have to pay high-interest rates over the loan that you borrow.
  • You will technically still be earning interest over your FD.
  • The loan against an FD is approved much easier for you, as the bank will be using your Fixed deposit with them as collateral, but with a personal loan, the approval of a loan depends on your application, reasons, credit score, and credit history and various other factors.
  • You would not have to reach out to a new bank to get the loan; you will be reconnecting with a bank you are already a customer of.

Q3. What is the tenure of the repayment of a loan against my fixed deposit from the Punjab National Bank?

The maximum tenure that you can take a loan against your FD is a period of 3 years.

Q4. How much of the FD value can I take out as a loan?

You can avail yourself up to 90% of the fixed deposit's value and not more than that.

Q5. What do I have to do to get a loan against my FD from Punjab National Bank?

You can do it offline through the bank, or you could do it online through the bank's portal.

Comparison of FD rates

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Tenure
Highest Interest Rates
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