Loan Against Bank FD , Good or Bad?

A Loan Against Bank Fixed Deposit, also known as an FD loan, is a type of loan that allows you to borrow money against the value of your fixed deposit account with a bank. In this type of loan, the bank holds your fixed deposit as collateral, and you can borrow money up to a certain percentage of the fixed deposit amount.

The interest rate on a Loan Against Bank Fixed Deposit is generally lower than other types of loans since the bank holds your fixed deposit as collateral. The repayment period of the loan is typically the same as the remaining tenure of the fixed deposit account.

To apply for a Loan Against Bank Fixed Deposit, you need to submit an application to the bank with details of your fixed deposit account, the loan amount required, and the repayment schedule. The bank will then review your application and decide whether to approve the loan or not.

It is important to note that if you are unable to repay the loan, the bank can liquidate your fixed deposit account to recover the outstanding amount. Therefore, it is essential to only borrow an amount that you can repay comfortably to avoid losing your fixed deposit.