Accessing Funds Without Liquidating Savings
SBI customers can use their fixed deposits (FDs) to borrow money without having to close the deposit. This allows individuals to gain access to funds while continuing to earn interest on their original investment. The process is generally straightforward, involving the FD serving as security for the loan.
Details of SBI Fixed Deposit Loans
SBI provides facilities for customers to obtain loans against their fixed deposits. This type of loan is considered a secured loan because the FD acts as collateral. Customers can continue to earn interest on their FD while repaying the loan. Interest is only paid on the amount of the loan that is actually used.
Availability: The loan facility is generally available for operational fixed deposit accounts.
Exclusions: Loans are not typically available against Tax Saving Fixed Deposits and Recurring Deposits.
Loan Types: Customers can choose between an overdraft facility or a term loan against their FD.
Process: Customers usually need to choose the loan type, specify the amount, and provide their FD details.
Key Features and Benefits
Preservation of FD: The primary advantage is that the FD remains intact, continuing to earn interest.
Lower Interest Rates: As it is a secured loan, interest rates are generally lower compared to unsecured loans like personal loans. The interest rate for the loan is often linked to the FD's own interest rate.
Flexible Repayment: Borrowers typically pay interest only on the amount borrowed. Partial or full repayment can often be made at any time without penalty.
Simplified Application: The process is described as simple, requiring an application and FD details.
Lien Marked: The bank places a lien on the FD, linking the loan limit to a savings account.
Default Consequences: In case of loan default, SBI reserves the right to adjust the outstanding loan amount against the FD balance.
Eligibility and Application
To be eligible for a loan against an SBI FD, individuals generally need to hold an operational fixed deposit account with the bank. The application process can often be completed online through the SBI internet banking portal. While not explicitly detailed in all provided summaries, requirements like a high-security password are mentioned in the context of online applications.
Interest Rates and Charges
The interest rate on a loan against an FD is closely tied to the interest rate of the fixed deposit itself. This relationship typically results in lower borrowing costs. Customers are only required to pay interest on the portion of the loan amount they utilize.
Considerations for Loan Against FD
When considering a loan against an FD, it is important to ensure that the FD's remaining maturity period aligns with the planned loan repayment schedule. While the bank takes steps to secure the loan with the FD, customers should be aware of the implications of default, where the bank can utilize the deposit to cover outstanding loan amounts.
Sources
SBI Loan against FD - Check Features & Eligibility Criteria: Published on BankBazaar, this article details the process and eligibility for SBI loans against fixed deposits, noting exclusions for tax-saving and recurring deposits.🔗 https://www.bankbazaar.com/fixed-deposit/loan-against-fd-sbi.html
Loan Against Fixed Deposit In SBI: Everything You Need To Know: Published on Kreditbazar, this article outlines the advantages of choosing SBI for FD loans, the availability of loans against tax-saving FDs, and the importance of aligning FD tenure with loan repayment.🔗 https://kreditbazar.com/blog/loan-against-fixed-deposit-in-sbi/
Loan Against FD Interest Rates 2025-2026 – Bank-Wise Comparison: Published on MyMudra, this article explains how loan against FD interest rates are determined, noting that the FD interest rate often influences the loan rate and that customers continue to earn FD interest.🔗 https://www.mymudra.com/blog/loan-against-fd-interest-rates
SBI Loan Against FD - Features, Eligibility, Interest Rates: Featured on AOL and published on Lemonn, this article highlights the lower cost of FD loans compared to unsecured loans due to collateral, flexible repayment options, and the bank's recourse in case of default.🔗 https://lemonn.co.in/blog/banking/sbi-loan-against-fd-features-eligibility-interest-rates/
Get Loan Against Fixed Deposit Online | SBI Personal Banking: Featured on AOL and published on Easybima, this article provides insights into how loans against FDs work and details the online application process for choosing loan types and amounts.🔗 https://easybima.com/news/loan-against-fixed-deposit-2025
SBI Loan Against Fixed Deposit (FD) | Check Eligibility & Apply Online: Featured on AOL and published on BuddyLoan, this article confirms that online applications for SBI loans against FDs are possible and discusses the option of top-up loans, as well as the bank's rights in case of default.🔗 https://www.buddyloan.com/sbi-loan-against-fd
Loan against Fixed Deposit - Yono: Published on SBI's official website, this article includes a disclaimer regarding potential inaccuracies and reserves SBI's right to modify content at its discretion. It notes that any action taken based on the content is at the user's own risk.🔗 https://sbi.bank.in/web/yono/loan-against-fixed-deposit
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