Loan Against Canara Bank FD

To open a fixed deposit with Canara Bank has never been more advantageous. Now, customers have the option to secure a loan against their fixed deposit account at Canara Bank. These FDs offer good interest rates and assured investment returns, as compared to regular savings accounts. Furthermore, Canara Bank's term deposit stands out as the top choice among fixed deposit options from various banks.

Canara Bank offers a secured credit option, usually called a Loan Against Fixed Deposit. This loan comes with a lesser interest rate compared to unsecured loans and is determined by the policies of the bank.

Key Characteristics Of Loan Against FD Canara Bank

Here are the key characteristics of a Loan Against FD Canara Bank:

1. Lower Interest Rates: These loans come with lesser interest rates as your fixed deposit serves as collateral. Typically, the interest rates are 2 to 2.5 percent lower as compared to personal loans, resulting in smaller monthly installments (EMIs).

2. Minimal Documentation: Since KYC documentation of the account holder has already been available at the bank since the opening of their FD, the paperwork required for a loan against your FD is minimal. You won't need to provide additional documents like ITRs, tax returns, or income proof.

3. Loan Amount Determinants: The maximum loan amount depends on various factors, including your income, loan term, credit score, and repayment plan. But, for a loan against an FD, the amount in your FD account primarily determines the highest amount of loan. A higher FD balance makes you eligible for a larger loan.

4. No Early Payment Penalties: Unlike other loans, there are no penalties for early repayment when availing a loan that is secured by an FD. This ensures that the bank doesn't incur losses on interest payments.

5. No Credit Score Requirement: While the bank typically checks your credit score for secured or unsecured loans, your credit score is not a factor in determining your loan application eligibility that is secured by an FD. This makes these loans accessible to individuals with poor or no credit history, including those who haven't used credit cards or other financial facilities.

Benefits of Taking a Loan Against Your Canara Bank FD

Here are the benefits of opting for a Loan Against your Canara Bank FD:

1. No Need for Premature FD Withdrawal: You can secure a loan against your FD without the necessity to prematurely withdraw funds, thus avoiding penalties for early withdrawal.

2. Zero Processing Fees: There are no processing fees associated with these loans.

3. Lower Interest Rates: These loans come with reduced interest rates, making them a cost-effective borrowing option.

4. Simple and Efficient Loan Processing: The loan application and processing procedure is straightforward and efficient.

5. Available for Local and NRI Fixed Deposits: This loan facility is accessible for both local and NRI fixed deposit holders.

Loan Against FD Canara Bank-Eligibility

To be eligible for a Loan Against FD Canara Bank and to qualify for the associated interest rate, the following criteria must be met:

1. The loan applicant for this secured loan must be an existing customer of Canara Bank.

2. This facility is open to each individual who holds fixed deposits, along with joint fixed depositors.

3. The applicant must be an Indian citizen or a member of a family trust, association, or society. Moreover, group companies, single proprietorships, and partnership firms are eligible to apply for this loan.

4. You cannot avail of these loans against a 5-year tax-saving fixed deposit.

5. Loans cannot be granted against fixed deposits held in the name of a minor.

Online Application Procedure- Loan Against FD from Canara Bank

For a Loan application against FD from Canara Bank online, follow these steps:

1. You need to log in to your Canara Bank net banking portal.

2. On the "Term Deposit" page, click "New Account" to choose the type of deposit account.

3. Provide all required details, including your personal information, payment details, maturity date instructions, and more.

4. Confirm the information by selecting "Open Deposit."

5. Finally, click "Confirm" to complete the process.

Canara Bank Loan Against Fixed Deposit- Repayment

Mostly, the repayment tenure is the same as your fixed deposit account tenure. You can avail a maximum repayment tenure of 10 years. However, it may vary on several other factors, including your loan amount. Before availing of a loan, discuss with your bank the repayment tenure offered by them. 

Conclusion

You may apply for a Loan Against FD from Canara Bank if you have an account there. You may get many advantages by doing this, like cheap interest rates, no late fees, fewer paperwork requirements, a simple loan application procedure, and no credit score consideration. Therefore, one of the safest and most effective lending choices accessible to Canara Bank account holders in times of acute financial need is to take out a loan against a fixed deposit from Canara Bank.