- During financial emergencies, instead of liquidating your investments, take a loan against them
- Among the most convenient and cheaper options is a loan against bank fixed deposit (FD)
- Banks charge interest rates of 1-2.5 per cent above the existing FD rate. Say, if FD is at 7.5 per cent. The bank would offer loan against FD at 8.5-10 per cent
- Banks don't check credit scores to lend against FDs, which makes it suitable for borrowers with a low credit score
- The documentation is minimum, there is no processing fees, and the FD continues to earn interest even during the tenure of the loan
- It also comes with flexible repayment terms. Interest is charged only on the amount withdrawn and for that specific period until the depositor repays
- The tenure of the loan is until the depositor’s FD matures and there are no foreclosure charges on prepayment or partial prepayment
TO READ THE FULL STORY, SUBSCRIBE NOW NOW AT JUST RS 249 A MONTH.
Already a premium subscriber? LOGIN NOW
What you get on Business Standard Premium?
- Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
- Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
- Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
- Pick your 5 favourite companies, get a daily email with all news updates on them.
- 26 years of website archives.
- Preferential invites to Business Standard events.
Subscribe to Business Standard Premium
Exclusive Stories, Curated Newsletters, 26 years of Archives, E-paper, and more!
First Published: Fri, October 04 2019. 12:29 IST