BANGALORE: Bank fixed deposits are one of the most preferred savings scheme by an average investor, as it gives higher rate of interest than a savings bank account. Fixed deposits come with many benefits attached to it. One such benefit offered to the customer by fixed deposits is that a customer can take a personal loan against it when required. The best part is that the interest charged on personal loan against fixed deposit is much lower than a regular personal loan. In simple words the bank gets the security of the fixed deposit against which it provides the loan.

Advantages of taking a personal loan against Fixed deposit: Yes, there are many possible ways through which customers can take a loan and use it for personal purposes that too avoiding high interest rates. But when compared to other loans, interest rates on personal loans against fixed deposits are comparatively lesser. The advantages of such personal loans are that they don’t require liquidating of fixed deposits; it has a hassle free processing, tenure for such loans extends up to maturity of fixed deposits and main point being   no penalties on prepayment. In simple words the borrower is free to repay the loan when his cash flows improve. So in case you have a fixed deposit and if you are not going to use it for your personal needs, you can use it to get a loan from a bank if needed.

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