Loan Against Bank of Baroda FD

A fixed deposit is among the most secure alternatives for investing offered by financial institutions, along with other banking institutions. If you have ever needed money urgently or considered breaking your fixed deposit, you have come to the perfect setting. It is never a smart idea to liquidate your investments in order to obtain a loan. You can alternatively ask your bank for an overdraft capacity. Bank of Broda serves as one of the country's largest banks, providing an extensive selection of services to its customers. A BOB loan secured by FD is one example of such a service. 

What is a Loan Against Bank of Baroda FD?

Bank of Baroda is India's second-largest banking institution. It is a Government of India Public Sector Undertaking. Bank of Baroda provides its customers with the choice of borrowing against their fixed deposit accounts. Customers can meet their financial needs without the need to use their fixed deposit account balances because it provides funds up to 95% of the amount of their fixed deposit. These loans are made available in the form of demand-based loans or overdrafts against deposits. 

BOB provides a variety of FD choices, including Baroda Advantage FD Non-callable, Short Term Deposits and Baroda Tiranga Plus Deposit Scheme, as well as internet-based banking and loan options. 

You might profit by wisely depositing your money in a 5-year tax-free fixed deposit arrangement. Additionally, under Section 80C of the Income Tax Act of 1961, you can generally save tax on the money you earn from Tax-saver FD Schemes up to  ₹1.5 lakhs annually. 

Features of Loan Against FD Bank of Baroda

The features of a loan against FD Bank of Baroda are as follows:

1. You can receive a loan from the bank in the following formats: demand draft, overdraft, or term loan.
2. It is accessible to take out a loan up to 95% of the present balance of the FD account.
3. It is required to take out a minimum of ₹25,000 loan against an FD.
4. When compared with unsecured loans, the interest rate is more affordable. It is provided by the bank holding the term/fixed deposit certificate as collateral.
5. Because an FD loan is not based on a person's credit score, it benefits individuals with low credit scores.
6. The maximum loan amount you can obtain is unlimited, with the exception of the margin requirement.
7. The application needs little documentation, which makes it an easy procedure.
8. When borrowing against FD BOB, there are no prepayment penalties.
9. If you decide to get out a loan against your FD, you will not have to deal with a prepayment fee. Furthermore, even if you choose to take out a loan against your FD, you are still eligible for interest on it.

Eligibility Criteria for a Loan Against BOB Fixed Deposit 

The following eligibility criteria need to be met to apply for a loan against the FD:

• Indian citizens
• Hindu Undivided Families (HUF)
• Joint account holders
• Sole proprietorship and partnership firms
• Public and private companies 
• Educational institutions
• Joint stock companies
• Clubs and associations
• Registered societies

Documents Required for a Bank of Baroda Loan Against FD 

Applicants need to submit the following documents for a loan against FD: 

• Completed filled application form for FD
• Identity proof:
  • Adhaar card
  • Passport
  • Driving licence
  • Voter ID card
  • Ration card
  • PAN card
  • Senior citizen ID card 
• Address proof
  • Electricity bill
  • Telephone bill
  • Voter ID card
  • ID card/certificate issued by post office
  • Passport
  • Bank statement
• Passport-size photographs of the applicant
• Copies of the PAN card
• Any documents needed for trusts, companies, associations, HUFs, registered societies and partnership firms.

How to Apply for a Fixed Deposit in Bank of Baroda?

You can apply for an FD using two methods:

Internet Banking

The following steps are used to apply for a fixed deposit in BoB using the online method: 

1. Go to the BoB website.
2. Choose the 'Fixed Deposit' option under the 'Account Opening' menu.
3. Choose an FD among the selections listed based on your investing requirements.
4. Select the 'Apply Now' choice.
5. Fill in the required information, such as your name, phone number, city, and so on. 
6. Click 'Submit' to confirm your eligibility and finish filling out the FD application form.
7. The FD will be registered once you submit the form.

Bank Branch

The following steps are used to open a fixed deposit account in BoB by visiting the bank branch: 

1. Go to the nearest BoB location.
2. Fill out the FD application form.
3. Provide the required documentation for the FD.
4. A BoB FD certificate will be issued against the account following the verification of your form and supporting documentation.

What Should You Know Before Applying for a Loan Against FD?

There are some factors one should consider before getting a loan against FD Bank of Baroda, such as the following: 

1. For the loan against FD, there is no specific term. The length of the fixed deposit essentially determines the maximum borrowing period possible. The payment procedure is similar to the process for home loans. The borrower makes timely EMI payments or follows the bank's guidelines.
2. Generally, loans backed by fixed deposits come with flexible payback plans from the bank. The only limitation is that the loan period cannot be longer than the duration of the fixed deposit that is being held with the bank. The loan might be paid off in a single payment or recurring payment.
3. Generally, BOB doesn't charge any fines or extra costs in the case of a loan against a foreclosure fixed deposit.
4. The bank charges no processing fees for loans backed by FDs, unlike house and personal loans. 
5. Banks often charge 2 to 2.5% higher interest on a loan against FD compared to what they do on the money that is deposited itself. 
6. The maximum loan amount allowed against an FD from the Bank of Baroda is 95% of the sum accessible through the fixed deposit account you have with the bank. You can also withdraw less than 95% of the amount in your FD, but the financial institution will not provide you with more than that proportion.

Conclusion

Getting loans against fixed deposits is an example of those necessary sources of funds during an economic crisis or money constraints. Rather than prematurely withdrawing your fixed deposits, you have no trouble getting a loan against FD from the bank in which you are currently holding them. Bank of Baroda has recently made it very simple for fixed deposit customers to obtain a loan against their accounts. If you are an Indian national holding an FD account with the Bank of Baroda, obtaining a loan against your fund is fairly easy. If you happen ever to need to fulfil an unexpected financial requirement, rather than liquidating your investments, consider taking out a loan on your fixed deposits from Bank of Baroda.