Loan Against HDFC Fixed Deposit

Emergencies are unavoidable, and borrowing money against a fixed deposit is the easiest way to receive cash when you need it fast. You can also get a loan against an FD rather than losing your entire investment.

You can use an overdraft if you have a fixed deposit with HDFC Bank. This is borrowing against the FD facility. You can borrow up to 90% of the overdraft on the Loan by the HDFC loan against the FD program. You are only required to return the Loan in the amount you actually borrowed interest. Your FD's remaining balance continues to earn interest at the standard HDFC Bank rate.

What is a Loan Against HDFC Bank FD? 

A Loan Against Fixed Deposit (FD) offered by HDFC Bank is a financial product that allows individuals to obtain a loan against the value of their fixed deposit with HDFC Bank. 

The key characteristics of a Loan Against FD HDFC Bank include: 

• Secured Loan: It's a secured loan where your fixed deposit with HDFC Bank serves as collateral for the Loan. The bank takes the FD as security, and the loan amount is some part of the fixed deposit value.
• Loan Amount: The loan amount is usually a certain percentage (typically 80-90%) of the fixed deposit's principal amount. The actual percentage may vary depending on the bank's policies.
• Interest Rates: The interest rates on loans against FDs are lower compared to unsecured loans because the fixed deposit provides security. The interest is typically charged on a reduced balance.
• Flexible Tenure: Borrowers can choose a flexible tenure for repayment, and the Loan is repaid in the form of monthly EMIs (Equated Monthly Installments). The repayment period may not exceed the remaining tenure of the fixed deposit.
• No Processing Fees: Some banks, including HDFC Bank, may not charge processing fees for loans against fixed deposits.
• Documentation: The documentation requirements are usually minimal as the fixed deposit itself acts as collateral. You would be required to fill out an application form and provide the necessary identification and FD details.
• Continued Earning on FD: while the fixed deposit is pledged as collateral, it continues to earn interest. The interest earned on the fixed deposit may offset the interest payable on the Loan.
• Prepayment Option: HDFC banks allow borrowers to prepay the Loan without any prepayment charges.

Who is Eligible for a Loan Against HDFC Fixed Deposit ?

The following criteria must be met to apply for a loan against an HDFC Fixed Deposit:

• Owners of NRO deposits may apply for a loan against FD.
• Holders of FD in NRE and FCNR are also eligible.

What are the Benefits of a Loan Against HDFC Bank FD? 

The Loan Against Fixed Deposit (FD) facility offered by HDFC Bank comes with benefits for individuals who have FD with the bank. Here are some key advantages:

• Quick and Easy Processing of Loan:  The loan approval process is very quick and easy as it is a secured loan, and the FD serves as collateral. This makes it a convenient option for those in need of immediate funds.
• No Need for Additional Collateral: The fixed deposit itself acts as collateral, so there is no need for additional security or guarantors. This simplifies the documentation process and makes the Loan accessible to a wider range of individuals.
• Lower Interest Rates: Loans against FDs generally come with lower interest rates compared to unsecured loans. 
• No Processing Fees: Some banks, including HDFC Bank, do not charge processing fees for loans against FD.
• Flexible Repayment Options: Borrowers usually have the flexibility to choose a repayment option that suits their finances. The Loan can be repaid as monthly EMIs, and the repayment period generally cannot exceed the remaining time of the fixed deposit.
• Continued Earnings on FD:  While the fixed deposit is collateral, it continues to earn interest. This means that, despite using the FD as security, the depositor can still earn returns on the fixed deposit.
• No Impact on FD Maturity: The fixed deposit for a loan does not impact the maturity of the FD. The fixed deposit continues to mature as per its original terms, and once the Loan is repaid, the FD is released back to the depositor.
• Prepayment Option: Some banks, including HDFC Bank, allow borrowers to prepay the Loan without prepayment charges. This provides flexibility to clear the amount before time if the borrower wishes to.

How To Apply for a Loan Against HDFC Bank FD Online? 

Step 1: Visit the HDFC bank website 

Step 2: Select "Invest" then "Deposits."

Step 3: Choose "Fixed Deposit".

Step 4: Select "Loan against fixed deposit."

Step 5: Select "Apply now."