Loan Against FD - ICICI Bank

One of the easiest and most economical ways to raise money is through fixed deposits. You would have two options for borrowing against your FD: apply for a loan from ICICI bank or ask for an overdraft from ICICI bank (OD).

What is Loan Against FD ICICI?

One of the financial instruments that we are most familiar with is a fixed deposit. Due to its simplicity of investing, guaranteed returns, flexibility, and other benefits, it is a customer favourite.

You can use this deposit to earn money while assisting your short- and long-term financial needs. For example, you might obtain an overdraft or loan against your fixed deposit. The only requirement is to have a fixed deposit on hand. The procedure is easy, hassle-free, and straightforward.

Characteristics of Loan Against FD Interest Rate ICICI

• You can take out a loan against an FD that you own either solely or jointly with your spouse.
• The punishment amount is capped at 90% of the fixed deposit's value. For instance, let's say you have an Rs. 1 lakh FD. Following that, you can choose a loan up to Rs 90,000.
• Flexible loan terms up to 18 months in length.
• There are no loan processing costs in contrast to other loans.
• There are no advance fees required.
• This is a highly beneficial form of credit when you don't have a credit history.
• The approval and disbursement process is quick, simple, hassle-free, and flawless compared to other loans.

Also, check - ICICI Fixed Deposit Interest Rates 2023

Who is Eligible for Loan Against Fixed Deposit ICICI?

• Indian citizens who live there.
• Undivided Hindu Family (HUF).
• Companies such as group companies, partnerships, and sole proprietorships.
• Societies, associations, and clubs.
• Family trusts.
• The ability to borrow money against one's fixed deposits is also available to non-resident Indians who have invested in fixed deposits - such as non-resident external (NRE), non-resident ordinary (NRO), and foreign currency non-repatriable (FCNR) deposits.

Benefits of Taking a Loan Against FD ICICI Bank

• There is no additional processing fee to pay, unlike with other loans. The overall cost of the loan is thereby decreased.
• Getting a loan against a fixed deposit is very easy. There isn't much paperwork to complete because you already have a fixed deposit account. Simply fill out the necessary paperwork, and you can even apply online for a loan against a fixed deposit.
• Many depositors may prematurely remove funds from their fixed deposit accounts to gain quick cash flow due to unfortunate circumstances, emergencies, and unforeseen occurrences. However, if you take out a loan against your fixed deposit, you can keep it intact while taking care of your immediate monetary needs. In this manner, you may efficiently control your cash inflow requirements, keep the interest income that can be made, and pay less interest on a loan.
• You may use the fixed deposit as collateral for a loan for the required sum. However, no portion of the fixed deposit will be used as collateral.
• There is no additional processing fee to pay, unlike with other loans. The overall cost of the loan is thereby decreased.
• Up to 90% of the fixed deposit's value may be borrowed. The remaining monies in the fixed deposit account will continue to earn interest even after the loan has been granted.
• The interest rate on loans secured by fixed deposits is significantly lower than other loans. Banks charge far less than the typical interest rate for personal loans.

FAQs

Q1. Can I get a loan from ICICI Bank based on my FD?

Yes, you can obtain a loan from ICICI Bank secured by an FD. You do not have to take any money out of your fixed deposit early and forfeit the interest. With a loan against an FD, the fixed deposit will serve as security for the loan. Typically, the loan's interest rate is 2 to 3 percentage points more than the FD interest rate.

Q2. Where can I get a loan against my FD from ICICI Bank?

There are various options to get a loan from ICICI Bank FDs, and you can choose either online or offline modes to do so. If you want to do it offline, you can go to the home branch where you hold a fixed deposit and speak to the bank executives who will help you. If you choose to do it online, you can either do it through internet banking or the iMobile mobile banking application. When you do it online, you must go to the FD account and choose the loan over the FD option.

Q3. Is taking out a loan against FD a wise idea?

Yes, taking out a loan against an FD is a wise move. The interest rate on personal loans and other forms of funding is greater. The loan is more expensive than an FD loan. Typically, the loan's interest rate is 2 to 3 percentage points more than the FD interest rate. There is no prepayment penalty and no processing cost for loans. It is preferable to seek a loan for the amount you require rather than withdrawing your entire FD, allowing the remaining funds to continue earning interest.

Q4. How much time can I take to repay the loan that I borrowed over my fixed deposit from ICICI Bank?

You will have to repay the loan before the fixed deposit maturity. This is because your ICICI Bank fixed deposit had played as the collateral towards the loan that you had borrowed from the bank. Therefore, the repayment of the loan needs to be done before the fixed deposit matures. 

Q5. What is the highest amount that I can take as a loan against my Fixed deposit from ICICI Bank?

You can get up to 90% of your fixed deposit value as a loan against it. This means - the larger the amount of your fixed deposit, the more you can borrow over the fixed deposit account that you hold in the ICICI Bank.