Bangalore: If you want to avail loan within a short interval, you can take it against your fixed deposits. One advantage you will get by taking a loan against fixed deposits is that, the interest rate on it is very less and in fact lower than the personal loans, reports ET Bureau

1. Conditions

One condition that is applied while taking the loans against fixed deposits is that, you can take loans up to 90 percent of the total value of your fixed deposit. However, you can avail the loan at any pant of time, as long as your fixed deposit is in the bank.

2. Interest Rate

While loans against fixed deposits comes with lower interest rates. Usually the interest rate does not exceed more than 2 percent above the interest paid on the deposit. However, the interest rate may change depending on the changing bank policies.

3. Application

Along with the loan application, you must also submit your fixed deposit receipts to your bank and depending on that, the bank will grant loan against your fixed deposit.

4. Repayment

Once you submit your documents and the loan gets sanctioned, the bank will prepare a repayment structure for you. You will get the opportunity to repay the loan installments or lump sum.

Points to Remember

1. Loans will not be granted if the account holder is a minor.  And it will only be granted if the fixed deposit is free from lien, restraint or encumbrance.

2. In case, if the fixed deposit is in the name of more than one account holder, then even though one person wants to take the loan, the other person has to sign for all the documents.

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