Yes, you can get a fixed deposit home loan, it is also called a loan against FD. While most people take a home loan by pledging the property they are buying, in this case, your FD acts as collateral to secure the loan. It is a secured loan, where your FD is pledged to the bank or financial institution. You can usually get up to 90% to 95% of your FD amount as a loan.
Can I Get Fixed Deposit Linked Home Loan?
Yes you can get a fixed deposit linked home loan.
The interest charged is usually 1% to 2% higher than the interest you earn on the FD. For example, if your FD earns 6.5%, the loan interest may be around 7.5% to 8.5%.
The loan tenure usually matches the remaining tenure of your FD. If your FD is for 5 years and 2 years have passed, the loan tenure can be up to 3 years. You don’t have to break the FD, which continues to earn interest.
You need to approach the same bank where your FD is held. Minimal documentation is required since the FD acts as security. The process is quick and hassle-free.
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Yes, you can get a home loan on fixed deposit, but it is typically referred to as an overdraft or loan against FD, not a home loan. While this loan type is secured by your FD, the funds you receive can be used for various purposes, including property purchase, though it doesn’t classify as a home loan.
How to Get Home Loan Against Fixed Deposit?
Here’s how it works:
When you take a loan against your FD, the FD acts as collateral. Banks and financial institutions generally offer loans up to 90% of the FD’s value, depending on the bank's policy.
The interest rates on these loans are generally 1-2% higher than the interest rate on your FD, making it a relatively low-cost borrowing option compared to unsecured loans.
Unlike some home loans, loans against FDs often come with flexible repayment options and no prepayment penalties. You can repay the loan as per your convenience without affecting your FD’s tenure.
The process for obtaining a loan against an FD is relatively simple and fast, as there are minimal eligibility criteria and no extensive paperwork, given that your FD already serves as collateral. I hope this answers your questions, can I get home loan on fixed deposit.
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2024-10-09T06:41:34+00:00 2024-10-09T06:41:35+00:00Comment
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