If you have ever found yourself needing urgent money and have contemplated breaking your Fixed deposits, you have landed on the right page. Liquidating your investments to avail of a loan is never a good idea. You can instead seek an overdraft facility with your bank. Bank of Broda is one of the leading banks in the country, and it offers its consumers a wide range of services. One such facility is a BOB loan against FD. Continue reading to understand its meaning and the procedure to avail it.
What is a BOB Loan Against FD?
Fixed deposits are considered a great saving instrument, and it is not really worth breaking it for a loan. Loan against FD is a service where the Bank of Baroda allows its FD account holders to avail of an overdraft facility against their fixed deposits. Based on the amount available in your FD account, you can apply for a loan against it. You can take this loan in either an overdraft facility, term loan, or a demand draft as per your choice.
This facility will help you sail through your financial hardships in one of the simplest ways possible.
Features and Benefits of BOB Loan Against FD
Following are some of the major benefits of taking a loan against FD in the Bank of Baroda.
- It allows you to keep your FD investments intact while getting a loan to meet your financial needs at the same time.
- The interest rate applied on this loan facility is quite affordable as compared to other loan types.
- The loan process comes with a Nil processing charge, which means a lower cost of borrowing.
- You can get a loan of up to 90% of the face value of your fixed deposit. Hence, the bigger your deposit, the bigger the loan you can take.
- There is no upper limit to the amount of loan you can avail of except for the margin requirement.
- The application requires minimal documentation, thus making it a hassle-free process.
- There are zero prepayment charges in case of a loan against FD BOB.
- It still allows you to earn an interest income on your fixed deposit.
Some of the salient features of this facility include:
- The bank allows you to get a loan facility in three forms, i.e. demand draft, overdraft, or a term loan.
- The loan tenure shall be the same as the remaining maturity period of your fixed deposit.
- You cannot avail of an advance on the same day on which the term deposit is issued.
- You will have to refer to the same branch where you created your FD account.
BOB Loan Against FD Interest Rate
Refer to the following table for the interest rates offered on BOB Loan against FDs:
|Particular||Rate of Interest|
|Loan or OD against the bank’s own deposits||1% over the interest rate of the fixed deposit|
|Advance against the securities of third-party FDR||1.00% over Deposit rate Or BRLLR + SP + 0.50%, whichever is higher.|
Eligibility Criteria for Availing Loan Against BOB FD
The eligibility criteria for availing a loan against your fixed deposit in Bank of Baroda are as follows:
- You must be a citizen of India.
- You must have an outstanding fixed deposit account in the Bank of Baroda.
How Can I Apply for a Loan Against FD in Bank of Baroda?
You can avail of a loan against FD offline. You can visit the nearest bank branch or call their toll-free number – 1800 5700.
How to Repay the Loan Against FD BOB?
You can repay the loan against FD BOB as bullet payments. This means you can repay the entire loan amount in one go at the end of the loan term.
How Much Loans Can I Avail on BOB Fixed Deposit?
The Bank of Baroda allows you to avail a loan of 90% against your fixed deposit amount. This means that if you have an outstanding fixed deposit amount of ₹1 lakhs, then you can avail 90% of it as a loan. In this case, it will be ₹90,000.
Bank of Baroda has made it very easy for its fixed deposit holders to get a loan against their fixed deposits. The loan against FD in the Bank of Baroda is quite easy to process if you are an Indian citizen with an FD account in the bank. If you ever want to meet your unforeseen financial needs, opt for taking a loan against your fixed deposits instead of liquidating your investments.