What is Loan Against FD Axis Bank?
The loan against the fixed deposit facility offered by Axis Bank is available to anyone who has a valid Axis Bank FD. All you need is a set of fixed deposit receipts that have been duly discharged in the bank’s favour, as well as a completed and signed application form. A 5 year Tax Saving Fixed Deposit is not eligible for a loan. Moreover, a fixed deposit in the name of a minor is not eligible for a loan.
Interest Rate on Loan Against FD Axis Bank
The interest rate for overdraft against FD is comparatively lower than for personal (unsecured) loans. The interest rate on loan against FD is 2.0% above the interest rate earned on your bank FD.
The interest is charged on the actual amount utilised and for the tenure of utilisation. There are no EMI or post-dated cheques required as in the case of other loans.
Tenure of Loan Against FD Axis Bank
A loan against a bank fixed deposit is a secured loan with the bank FD as security. As a result, the loan’s duration is unspecified as long as the bank FD remains active. You also have the option of repaying the loan during that time period.
Benefits of Loan Against FD Axis Bank
- Get access to a loan amount of up to 85% of the fixed deposit amount. The minimum loan amount is Rs 25,000.
- In the case of an emergency, you can take a loan against FD rather than withdrawing your FD. By withdrawing your FD you will be paying a penalty charge.
- The interest will be applicable on the amount utilized and the tenure for which the amount is used.
- The overdraft facility is available for a minimum tenure of 3 months
- No loan processing fee charged
- No fee on prepayment of the loan amount
- A very useful means of credit when you do not have a credit history
- Compared to other loans, the approval and disbursement process is seamless, easy, hassle-free, and timely.
How to apply for overdraft against bank FD and the process?
- To use the service, customers must go to their nearest Axis bank office and fill out an application form. The bank will then proceed with its procedures, and if you have any questions, the branch executive will be able to supply you with detailed information.
- The loan will be sanctioned after a comprehensive examination in accordance with the bank’s current instructions and credit policy. The presence of margin and security will not serve as a substitute for proper diligence.
- SR must be increased by the branch. The central team should open the OD account in I-leverage. After verifying all information, the central team creates an account for the consumer to use.
- The bank will release all securities held upon complete repayment of the loan. And, if the bank decides to keep the security, you, the borrower, will be informed of any outstanding claims as well as the documentation that allows the bank to keep the security until the relevant claim is paid/settled.
Terms and Conditions for Loan Against FD Axis Bank
- The interest debited in the account constitutes a demand in and of itself. It must be reimbursed within 7 days of the interest debit. If you fail to reimburse the interest then the bank has the right to debit the SB account. Alternatively, the bank can liquidate the FD linked to the account to make up the overdue sum.
- However, if the Borrower fails to pay the above-mentioned amounts in default for payment, as well as the penal interest and other charges imposed by the Bank, within 90 days of the due date, the loan or drawl account would be designated as a Non-Performing Asset (“NPA”).
- To get the aforementioned loan or drawl account into good standing, the Borrower must pay all of the above-mentioned amounts in default, as well as penal interest and other charges, as applicable, [immediately].
- Borrowers must only use borrowed money for the purpose for which the loan was given. They cannot make any material transfers from such funds to their group entities without the Bank’s permission.
Like planning for stated financial goals, managing contingency needs is a key element of personal finance. Because uncertainties and emergencies do not call, it is critical to managing cash demands.
Taking an overdraft against an asset, such as a bank FD, during a financial emergency will be significantly more prudent than liquidating or selling investments built with hard-earned money over time to meet specific financial goals.
As a result, borrowing wisely, within your means, and repaying on time will benefit your long-term financial well-being and increase your creditworthiness.