✅We discuss loan against fixed deposit or loan against FD, especially its features and how you gain from it by making the most out of it.
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Previous video on Loan Against FD: https://youtu.be/5Boud8SQVsw
Overdraft/OD playlist: https://www.youtube.com/playlist?list=PLfnE1LvH_GLGxsYRTlolUyb_2wpoN-g9U
Edited Highlights
0:00 Here, we will discuss loan against fixed deposit or loan against FD
0:09 This is a popular form of secured loan
0;13 Against your fixed deposits, bank gives you a loan
0:17 We will discuss the essential features of loan against FD
0:24 Loan against fixed deposit is good way by which you don’t have to make a premature exit or premature encashment of FD
0:30 It is the most liquid and easy accessible secured loan
0:39 It ensures that you don’t lose out on the interest income. When the emergency gets over you can repay it
0:53 For entrepreneurs and businessmen, it is a handy tool to fund your working capital
1:31 In a loan against FD, you take a loan against bank fixed deposit
2:01 Check out our previous discussions on overdrafts whose playlist links are provided in the description section
2:23 The amount you get for loan against fixed deposit depends on the bank
2:30 The bank is almost certainly going to give a loan against FD of the same bank
2:49 The loan amount can vary from 80% to 95% of the FD amount
3:00 The loan amount can range from Rs 25,000 to Rs 5 crore
3:11 Tenure of loan against FD can go up to 3 years but it depends on the term of the FD
3:15 It can never be more than the term of the FD
3:25 You need to pay within the FD term when you take a loan against FD
3:34 If you fail to do so, the outstanding amount is deducted from the FD maturity proceeds
3:52 You can make regular loan repayment or do it at one go
4:03 Tax saving FDs don’t qualify for loan against FD
4:21 Loan against FD interest rates are among the lowest among loan against assets or secured loans
4:26 The interest for the loan is typically 50 basis points or 0.5 percentage points higher than the fixed deposit interest rate
4:32 It can be 2 percentage points higher or 200 basis points higher than fixed deposit interest rate
4:39 If you get a loan against FD, don’t go for a personal loan since the interest rate will be higher
4:51 However, you requirement could be higher than FD amount and loan against FD depends on the size of your FD
5:09 When you need cash during an emergency and you can’t repay in one credit card cycle, loan against FD makes sense
5:18 There is typically no processing charge and it is typically very quick in terms of disbursement
5:25 If you have to go for a loan, this is where you start
5:31 When your repayment is finished you need to get the lien removed
5:48 Most banks offer loan against FD in the form of overdrafts or OD
6:08 The credit line created with a loan against FD with your overdraft and you pay only for the overdraft amount used
6:21 If you don’t repay the outstanding amount for OD by the maturity of the FD, it gets deducted from the maturity amount
6:33 The interest rate for overdraft can be 2 percentage points or more, higher than the fixed deposit interest rate
6:43 There is no prepayment penalty for loan against FD
7:22 Apart from loan against FD, try borrowing from family and friends, avoiding costlier loans
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