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Loan Against FD - SBI

The State Bank of India, inarguably the largest public sector bank in the country, offers its customers all types of loans, including loans against FDs. Loans are required for different needs such as education, vehicles, home, and more.

With regards to this, SBI gives loans to its customers according to their fixed deposits without them having to break the Fixed Deposit. The initiative is beneficial for those looking to get a loan as the interest rate is lower when compared to other kinds of loans in the financial sector. 

What is Loan Against Fixed Deposit SBI?

The Loan Against FD SBI is a demand or overdraft loan given to clients who already have fixed deposits in the State Bank of India.

In fact, the loan amount has been approved based on their FD amounts. However - you do not have to break your FD to get the loan. It is mainly constructed to assist meet almost all of the financial needs or urgency regarding home construction, education, renovation, vehicle purchase, and more.

Also, check - SBI FD interest rates 2022

Access to fixed deposits
of various banks
Invest without opening
a new bank account
Avail high interest rates
of up to 6.5%
OPEN FD ONLINE

Characteristics of Loan on FD SBI

In order to better understand the loan against FD SBI and how it works:

1) Purpose of the Loan

The loan against SBI FD is offered to assist its customers in meeting any of their financial needs. 

2) The Amount of Loan

The loan amount is limited to 90% of the FD amount.

3) The Repayment of the Tenure

SBI lets the borrowers repay the loan within a flexible tenure, ranging from 3 to 5 years. However, the repayment of the loan repayment tenure is decided on numerous determinants, which are inclusive of the loan amount and the borrower's repayment capacity. 

4) Loan Against FD SBI Interest Rate

The interest rate is 1% more than the fixed deposit rate for the loans on FD of SBI.

What are the Benefits of Availing a Loan Against FD from SBI?

Here are some of the benefits of taking a loan against the FD from the State Bank of India:

  • The bank can enable clients to enjoy loans of up to 90% of the total value of the term deposit. It means that if you have a high amount of deposit in your SBI FD, you could simply get your way into an attractive and flexibly assistive loan amount to meet any financial emergencies.
  • Since there is an existing relationship with the bank, and it is a type of secured loan, the loan against this FD is attractive and low as 1% beyond the relative time deposit rate.
  • SBI offers both demand and overdraft loans that can be availed according to the needs of an individual. The minimum loan amount is Rs. 25k in the case of an online overdraft loan against SBI FD - while the maximum amount is Rs. 5 crore. But, you cannot exceed more than 90% of the amount in one's SBI term deposit.
  • No processing charge will be imposed on the individuals who have loans against SBI FDs.
  • The security interest is given to the FDs. It makes the loan repayment incredibly simple. Even after the loan repayment tenure, the borrower can earn interest on the existing FD that they could then utilize to pay their loan EMIs.
  • As flexible as it could get, with the loan of FD SBI, you could even prepay your EMIs without additional charges. It means you will not have to comply with the loan repayment tenure and could close it by paying early.
  • The SBI loan against an FD repayment period is determined majorly by the individual's repayment capacity. The benefit is that the bank will offer the customers who apply for the facility the maximum repayment tenure ranging from 3 to 5 years. The maximum payback period for SDTR/e-STDR is five years, whereas the maximum period for TDR/e-TDR is three years. In addition, if you visit the branch to apply for the loan, you can discuss your alternatives for the payback time with the bank representative.

Who is Eligible for the Loan Against FD SBI

In order to avoid any issues during the application for loans against FD SBI, the eligibility criteria are:

  • A State Bank of India Fixed Deposit account with the bank is required of the applicant.
  • At least 21 years of age is required.
  • The applicant's FD, which is being used as collateral for the loan, cannot have matured.
  • Individual customers of SBI Bank who have TDR, e-TDR, STDR, or e-STDR are eligible to use this facility.
  • This loan is also available to customers who have registered with SBI for RD/e-RD/RFC/NRE/FCNR (B) deposits.
  • Businesses are able to use this service if they are a sole proprietorship or partnership firm.

How Can I Apply for an SBI Loan Against FD?

There are online and offline modes of application available for the loan on FD SBI. However, you need to have a loan or an overdraft account with the State Bank of India to opt for this facility. 

  • Step 1: You will have to sign in to your State Bank of India net banking account with the user ID and password.
  • Step 2: You will have to go to the menu section and tap on the e-fixed deposit option.
  • Step 3: Choose the overdraft against the Fixed Deposit option from the displayed menu.
  • Step 4: Once you have chosen it, you can view the active deposits on the screen. You will have to choose the FD against which you wish to apply for the overdraft.
  • Step 5: Choose the proceed button and then confirm the overdraft amount with the interest rate applicable on the overdraft as well as the expiry date.
  • Step 6: Now, you will get a security password on the registered phone number, you will have to authenticate it by entering it in the needed field, and your account will be activated. 

FAQs

Q1. How do I use the online service?

By going to onlinesbi.com and logging into internet banking with the username and password. The e-Fixed Deposit tab has information about it.

Q2. Can a fixed deposit be used as collateral for my loan?

Customers are permitted to foreclose on their debt by many banks and NBFCs. You can make the repayment and avoid paying additional fees in the form of interest rates if you have enough money to pay off the loan before the term is up. You should be aware, nonetheless, that in this situation, most banks and NBFCs levy foreclosure fees in specific circumstances.

Q3. Is a loan secured by FD a wise move?

A loan against FD SBI offers to be a reliable and good option to choose from when it is paying your bills because of the loans' competitively low-interest rates, flexible prepayment options, and loans granted at up to 90% of the fixed deposit account.

Q4. When using the SBI branch, is there a maximum amount that can be used?

No, when a borrower applies through a bank, there is no upper restriction on the total loan amount that can be obtained.

Q5. Are NRIs eligible for fixed deposit loans?

As long as their fixed deposit accounts are active, individuals are eligible for and may obtain loans.

Comparison of FD rates

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Tenure
Highest Interest Rates
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