A loan against FDR is one the easiest method of getting a loan from the banks in this arrangement somebody gets the Loan/ from the Bank against his/her existing Fixed Deposit. When somebody needs funds and he/she is having Fixed Deposit and he/she does not want to break his Fixed Deposit before fixed tenure to avoid pre-mature withdrawal charges, he/she can take the Loan/Over Draft Limit against the Fixed Deposit. The Bank will create lean on his Fixed Deposit and will give him Loan (Term Loan or Over the Draft Limit). 

Benefits of Loan Against Fixed Deposit

1. No Requirement of Minimum CIBIL Score:- Banks generally give loans to people who are having CIBIL Score of 630+. However, in the case of Loans against FDR you need not have a good CIBIL Score and the loan can be granted to the person who is having CIBIL Score of <630.

2. Nil Processing Fee:- The Banks do not charge any processing fee when they give the Loan against Fixed Deposit.

3. No requirement for Financial Data:- There is no requirement for submission of Income Tax Returns, Salary slips, Form -16, and other Financial Data to Bank

4. Less Time for Sanction:- The processing of the Loan against FDR is very simple and anybody can take a loan the same through online or visit the Bank Branch in which he/she is having Fixed Deposit.

5. Rate of Interest:- The Rate of Interest is very less in the Loan against a Fixed deposit as compared to an Unsecured Loan. The Bank charges the interest @ Fixed Deposit Rate+ (0.50 % to 2%), which can vary from Bank to Bank.

6. No Fear of NPA:- The Banks generally give the Loan 85 % to 95% of the Fixed Deposit Amount therefore no fear of NPA to the Banks. If the borrower will not pay the Loan Amount the Bank will recover the same from the fixed deposit.

7. No Requirement to Break the Fixed Deposit:- You need not break your fixed deposit to intact your emergency funds requirement and you can take the loan
against Fixed deposit and repay the same later on and use the Fixed Deposit to your desired goal.

8. Also available to the Non-Resident Indian:- Unlike another credit facility the Loan Against FDR is available to the Non-Resident also because banks will create the lien on Fixed Deposit therefore they need not worry about the recovery from a non-resident.