Fixed deposits (FDs) have long been a trusted avenue for conservative investors seeking stability and assured returns. Aside from providing modest returns, it offers investors a credit solution called a Loan Against Fixed Deposit (LAFD).
Loan Against FD is a credit facility extended to individuals who hold fixed deposits. Instead of prematurely breaking the loan on fixed deposit and losing out on interest earnings, one can opt for this option and utilise the amount as collateral. This financial manoeuvre allows you to access funds without compromising the stability of your investment.
Benefits of Loan Against FD
Here are some advantages you could utilise by availing of a loan against FD:
- Maintain FD Investment
By opting for this option, you retain the benefits of your investment, such as the agreed-upon interest rate and the tenor. The FD continues to earn interest while serving as collateral for the loan.
- Quick Processing
It typically involves minimal documentation, making the processing time swift. This is advantageous when you need urgent funds, as the loan can be disbursed promptly.
- Low Interest Rates
The interest rates on loans against FDs are generally lower compared to other forms of unsecured loans. This makes it a cost-effective option for meeting your financial needs.
- No Impact on Credit Score
Since the loan is secured against the FD, it does not impact your credit score adversely. This is particularly beneficial for individuals looking to manage short-term liquidity without affecting their creditworthiness.
How to Avail a Loan Against FD
If you’re interested in applying for a loan against FD, here are some steps you could take to get started:
- Contact the FD issuer
Reach out to the bank or company where you hold your FD.
- Check Eligibility
The eligibility criteria may require you to be above 18 years of age or an Indian citizen, or a part of a Hindu Undivided Family (HUF). Other parameters include being a sole proprietorship or partnership firm.
- Submit Application
Depending on the issuer, they may ask you to submit certain documents necessary for KYC and proof of investment. Before applying for the loan, ensure that you verify the documents required and keep them handy at the time of submission.
- Approval and Disbursement
Once the application is processed, the loan is approved, and the funds are disbursed directly to your bank account.
Applying for a Loan Against FD on Bajaj Markets
If you are considering getting a loan against FD, then you can consider online financial marketplaces like Bajaj Markets. Here, you can benefit from no prepayment charges and processing fees, and flexible repayment options, among others.
You can easily avail of a loan against your Bajaj Finance Fixed Deposit. Here are the steps you must follow to apply for one:
- Navigate to Bajaj Markets’ website and log in using your credentials, if you’re an existing customer
- If you are an existing customer, log in using your credentials. New users can register by providing the required details
- Head to the ‘Loans’ section and click on ‘Loan Against FD’
- Fill in your basic details such as name, phone number, pincode, email address, etc.
- After you click on proceed, you will get a prompt informing you that a representative will get in touch with you
Upon sanction, the loan amount will be disbursed to your registered bank account.
A loan against FD offers a strategic and low-risk approach to meet your credit needs without compromising the stability of your investment. This credit solution allows you to access funds swiftly, maintain your financial stability, and navigate through unforeseen expenses with confidence.
Explore your options on online financial marketplaces like Bajaj Markets. Whether it’s for a medical emergency, education, or any other financial requirement, a loan against FD stands as a viable and prudent solution in your financial toolkit.