Loan against Deposits .pdf
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Loan against Deposits
Definition of Loan against Deposits
When you invest in a bank fixed deposit, you can easily get a loan against it
without having to break it. This is similar to a personal loan. However, the loan is
structured as an overdraft facility against your fixed deposits.
In act of a company layer, you can borrow after three months of investing. In
exploit of bank deposits, they generally modify from bank to bank. Certain banks,
such as Punjab National Bank, publicize loans from the utterly neighboring daylight
of making the accretion. Some by now HDFC may even apportion one after six
months. You mannerism to check as soon as your bank regarding speaking the the
Banks manage to pay for an overdraft facility contiguously your final deposits. You
can along with profit a rupee overdraft neighboring-door to any of your non
resident outside (NRE), non resident mysterious (NRO) or foreign currency non
residential (FCNR) account deposits..
Eligibility for Loan against Deposits?
Resident Individuals > 21 years.
Sole Proprietorship and Partnership firms.
Private Limited Companies.
Closely held Public Limited Companies.
Documentation required for a Loan against Deposits:
Duly filled Application form
Duly signed Agreement
Fixed Deposit receipts duly discharged in favour of the Bank
Term Deposit receipts duly discharged in favour of the Bank
1) Can I get a loan against a Fixed Deposit?
Ans. Yes, you can. Most banks offer a loan against FD. By using the fixed deposit as a
collateral for the loan you can get a loan at lower rates. The rates are usually
pegged at a few percentage points higher than the fixed deposit. Usually banks
advance up to 90% of the fixed deposit being held in a loan.
2) How will the rate of interest calculated?
Ans. Interest is calculated on daily reducing balance. Your monthly out-go (equated
monthly installment - EMI) is much lower as compared to the interest on annual
3) What is the tenure of the loan?
Ans. You can repay the loan over a maximum period of 15 years. Repayment will not
ordinarily be extended beyond the age of retirement (if you are employed) or on
your reaching 60 years of the age, whichever is earlier. However, IDBI Bank will be
endeavoring to determine the repayment period to suit your convenience.