There is no denying that the State Bank of India (SBI) is India’s biggest public sector bank and that it offers a wide variety of loans to its clients, including loans against Fixed Deposits (FDs). Loans are necessary for almost every aspect of modern life, from funding one’s education to purchasing a house or car. That’s why SBI gives its clients access to loans secured by their fixed deposits without requiring them to surrender the principal.
This article is helpful for those who are seeking an SBI loan since the interest rate is cheap in comparison to other loan options in the financial system.
Let’s start the discussion on how to avail loan against FD in SBI.
SBI Loan Against FD Quick Recap
|Interest rate||1% above time deposit rate|
|Avail Loan||Up to 95% of Time Deposit|
|Minimum Loan||Rs. 5,000|
|Maximum Loan||Rs. 5 Crore|
|Eligibility Age||21 and hold an SBI FD account|
|Type of Loan||Demand Loan & Overdraft Loan|
Also Read: SBI YONO Personal Loan
Benefits of SBI Loan Against FD
Loan Up to 90%: An individual may borrow up to 90% of their FD’s value as a loan. With a larger SBI fixed deposit, you’ll have a greater chance of getting a sizeable loan if and when you need it.
Two Types of Loan: Borrowers may choose between demand loans and overdraft loans, depending on their specific circumstances. You may borrow between Rs.25,000 and Rs.5 crore in interest-free overdraft loans against your SBI fixed deposit (FD) online. Maximum withdrawals are capped at 90 percent of the initial SBI term deposit amount.
No Processing Fees: There are no origination fees or prepayment penalties for borrowers using their SBI fixed deposits as collateral for loans. For these reasons, loans secured by time deposits at the State Bank of India are widely used. When compared to the bank’s other loan options, this one gives the client a lot of wiggle room thanks to the lack of a processing charge and the absence of penalties for early repayment of the loan principal.
Low-Interest Rate: The interest rate on a loan taken out against a fixed deposit is merely 1% more than the rate at which the FD itself is being held. Because of the borrower’s established relationship with the bank and the loan’s classification as a secured loan, the interest rate is more favorable than for unsecured loans.
Earn Interest from FD: The FD earns income, and security interest is granted on fixed deposits. There is an added bonus in that the borrower may increase the interest rate on his or her current fixed deposit. In the long term, this aids the person by allowing him or her to return the borrowed money against the fixed deposit.
Also Read: SBI Home Loan Apply
Eligibility Required for SBI Loan Against FD
- Both the applicant’s age and the balance in their SBI FD account at the bank must be at least 21.
- The loan cannot be taken out if the FD being used as collateral has already matured.
- Anyone who has a TDR, STDR, e-TDR, or e-STDR with SBI may use this service.
- Those who have an account with the bank and have made deposits in an RD, an e-RD, an NRE, an RFC, or an FCNR (B) are also qualified.
- Only sole proprietorships and partnerships are eligible to use this service.
Also Read: SBI e-Mudra Loan
SBI FD Loan Limit
There is interest to be paid on the loan that is secured by the fixed deposit, and the percentage that may be borrowed varies from 75% to 90%.
SBI FD loan: how to apply?
- First, go into your SBI internet banking account.
- Second, choose e-Fixed Deposit from the options.
- Three, choose the “Overdraft against Fixed Deposit” option.
- Third, choose a deposit from the list and ask to use it as an overdraft.
- The fourth step is to click “Proceed” and double-check the overdraft amount, interest rate, and due date.
- Proceed to Step 5 and verify your identity by entering the high-security password sent to the mobile device you registered with.
- Customers who prefer to use the Branch’s services may do so as well.