A loan against deposit is a secured loan facility that allows individuals to borrow funds by pledging their fixed deposit or term deposit as collateral. This type of loan helps meet short-term financial needs without breaking the deposit, ensuring that you continue to earn interest on your savings while accessing liquidity. Loan against deposit offers quick approval, lower interest rates, and flexible repayment options. The loan amount is usually a percentage of the deposit value, making it a cost-effective borrowing solution for emergencies and planned expenses
The cost of a loan against deposit depends on the deposit amount, tenure, interest rate, and lender policy.
Since the loan is secured against an existing deposit, the risk to the lender is minimal, resulting in lower
interest rates compared to unsecured loans
Borrowers retain ownership of their deposit and continue earning interest. Once the loan is fully repaid, the
lien on the deposit is removed
This loan allows borrowers to avail funds by pledging their fixed deposit while continuing to earn interest on it. It provides easy access to liquidity without breaking the deposit, helping meet short-term financial needs. With lower interest rates and flexible repayment options, a loan against fixed deposit is a cost-effective way to manage temporary cash requirements while keeping savings intact.
Easy availability of funds - Lower interest burden - Continued interest earnings on deposit
This category enables borrowers to raise funds against tax-saving fixed deposits, subject to lender policies
Access liquidity without losing tax benefits - Quick processing
Eligibility criteria are generally simple and include:
Borrowers can choose to repay interest periodically and principal at maturity or opt for regular EMIs.
Some lenders offer an overdraft facility against deposits, allowing withdrawals as per requirement.
A loan against deposit is a smart financial option for individuals seeking liquidity without disturbing their savings. With low interest rates, quick processing, and continued interest earnings, it offers a secure and efficient way to manage short-term financial needs