SBI is one of the premier banking institutions in India, and it offers a loan against fixed deposit (FD) to its customers. This type of loan on FD SBI is considered to be highly secured since the individual provides the bank with their fixed deposit as collateral. Plus, the process of applying for a loan against FD SBI is quite straightforward and flexible. Moreover, It is a great option for those needing to meet unexpected expenses in a pinch. So, let’s take a closer look at what exactly a loan on FD SBI entails, the various features and benefits offered, and how one can apply for it from home.
Table of contents
- What is an SBI Loan Against a Fixed Deposit?
- Loan Against Fixed Deposit SBI – Features
- Benefits of Loan on FD SBI
- Eligibility Criteria for Loan Against FD SBI
- Loan Against FD SBI Interest Rates
- How to Apply for an SBI Loan Against FD?
- Steps to Apply for a Loan on FD SBI Online
- Steps to Apply for Loan on FD SBI Offline
- Final Thoughts
- Frequently Asked Questions (FAQs)
What is an SBI Loan Against a Fixed Deposit?
A loan against FD SBI is a demand or overdraft loan given to customers who already have fixed deposits in SBI. The loan amount is approved based on their fixed deposit amounts. However, you don’t have to break your FD to avail of this loan. Moreover, it is specifically designed to help meet almost all your financial requirements or urgency regarding education, home construction or renovation, vehicle purchase, etc.
Loan Against Fixed Deposit SBI – Features
To better understand the loan against Fixed Deposit SBI and how it works, let’s take a look at its following features:-
| Loan Amount | The loan amount is capped at 95% of the fixed deposit amount. |
| Rate of Interest | The interest rate is 1% above the FD rate for loans on FD SBI. |
| Loan Purpose | A loan against SBI FD is offered to help its customers meet any of their financial requirements. |
| Loan Repayment Tenure | SBI allows borrowers to repay the loan within a flexible tenure, ranging between 3 and 5 years. However, the loan repayment tenure is decided on numerous determinants, including loan amount and borrower’s repayment capacity. |
Benefits of Loan on FD SBI
Here are some key benefits of a loan against SBI FD that can help shape your decision on this stance for good.
- Demand and Overdraft Loans: SBI provides both demand and overdraft loans that can be availed as per the requirements of the individual. The minimum loan amount is Rs.25,000 in case of an online overdraft loan against SBI FD, while the maximum amount is Rs.5 crore. Know that one cannot exceed 90% of the amount in one’s SBI term deposit.
- Low-Interest Rates: Since the individual has an existing relationship with the bank, and it is a type of secured loan, the loan against the FD interest rate is as attractive and low as 1% beyond the relative time deposit rate.
- Zero Processing Fees: No processing charges are imposed on individuals who have loans against SBI fixed deposits.
- Adequate Loan Amount: The bank enables customers to enjoy loans up to 90% of the total value of their term deposit. This means that if you have a high amount of deposit in your SBI fixed deposit, you can easily weasel your way into an attractive and flexibly helpful loan amount to meet any of your financial urges.
- Interest on the FD: Security interest is provided on the fixed deposits. This makes loan repayment incredibly easy as even during the loan repayment tenure, the borrower earns interest on their existing FD, which they can then use to pay their loan EMIs.
- No Prepayment Charges: As flexible as it can get, with a loan on FD SBI, you can even prepay your EMIs without any additional charges or penalties. This means that you do not have to adhere to the loan repayment tenure and can close it quickly by paying early.
- Easy Repayment Period: The SBI loan against FD repayment tenure is determined majorly by the individual’s repayment capacity. The fun part here is that the bank offers the customers who apply for this facility the maximum repayment period ranging from 3 to 5 years.
| Here, 5 years is the maximum repayment tenure in the case of SDTR/e-STDR and 3 years for TDR/e-TDR. Additionally, you can even negotiate the repayment period options with the bank representative if you visit the branch to apply for the loan. |
Eligibility Criteria for Loan Against FD SBI
To avoid any issues while applying for a loan against FD SBI, you know the eligibility criteria for it as mentioned below.
- The applicant must have an SBI Fixed Deposit account with the bank.
- The applicant should be at least 21 years of age.
- The FD of the applicant against which the loan is being availed must not be matured.
- Customers who hold TDR/e-TDR/STDR/e-STDR with SBI bank individually are eligible to avail of the facility.
- The customers who are registered with SBI for depositing in RD/ e-RD/RFC/NRE/FCNR (B) can also enjoy this loan.
- Businesses, in the case of a sole proprietorship/partnership firm, are eligible to enjoy this facility.
Loan Against FD SBI Interest Rates
| Type of Fixed Deposit | Applicable Rates of Interest |
| Loan against NRO fixed deposits | 1% over the FD interest rate |
| Loan against FCNR (B) deposits | 2.90% over the 1 year-MCLR mark |
| Loan against NRE fixed deposits | 1% over the FD interest rate |
| Loan against regular fixed deposits | 1% over the FD interest rate |
How to Apply for an SBI Loan Against FD?
Both online and offline modes of application are available for loan on FD SBI. However, you must have a loan or overdraft account with SBI to opt for this facility.
In this section, let’s see how you can apply for a loan on FD SBI online and offline.
Steps to Apply for a Loan on FD SBI Online
- Sign in to your SBI net banking account with your user ID and password.
- Go to the Menu section and tap on the ‘e-Fixed Deposit‘ option.
- Select the Overdraft against Fixed Deposit option from the menu that appears.
- Once you have opted for it, you will be able to view the active deposits on your screen. Select the FD against which you wish to apply for an overdraft.
- Click the ‘Proceed‘ button and after that, confirm the overdraft amount along with the interest rate applicable on overdraft as well as the expiry date.
- Finally, you will receive a security password on your registered phone number. You need to authenticate it by entering it in the required field, and your account will be activated.
Steps to Apply for Loan on FD SBI Offline
To open an overdraft account with SBI offline, simply head to the nearest SBI branch, fill out the form and attest the required documents. Since you already have an SBI savings and FD account, the bank will require minimal documentation from you.
Final Thoughts
A loan against FD SBI is one of the smoothest solutions for you to settle any hefty expenses once and for all. The best part for you to revel in the loan is that it is friendly with the budget, which you may set to pay for the cost of the loan. On top of that, you can negotiate on the interest rates if your credit score and repayment history look good. For more details, you can check the official SBI website or contact the bank.
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Frequently Asked Questions (FAQs)
Can I take a Loan Against SBI FD?
Yes, you can avail SBI loan against your term deposit. The minimum overdraft loan against FD is Rs 25,000. The maximum limit is Rs 5 crore.
How much Loan can I take on FD?
The limit on the loan against fixed deposits usually ranges from 75% to 85%. However, the loan amount depends on the bank. For instance, ICICI bank offers up to 90% loan against FD while Axis bank provides up to 85% loan amount for the same. The loan amount is also determined by several important factors like your relationship with the bank, credit score, repayment capacity, etc.
How do I Repay my SBI Loan Against a Fixed Deposit?
You can repay your loan against FD SBI via different payment channels such as NEFT, NetBanking, and also opt to set up a NACH mandate to have the EMI automatically debited from your account.
Is a Loan Against FD a Good Option?
With competitively low-interest rates, flexible prepayment options, and loans approved at as high as 90% of the fixed deposit account, a loan against FD SBI proves to be a good and secure option to choose to get your expenses met.
Can I Foreclose my Loan Against a Fixed Deposit?
Many banks and NBFCs allow customers to foreclose the loan. If you have an amount sufficient to close the loan before the tenure, you can make the repayment and save up on extra charges that come in the form of interest rates. However, you must note that most banks and NBFCs charge foreclosure fees pertaining to certain conditions in this case.
