Loan Against SBI Fixed Deposit
State Bank of India (SBI), inarguably the largest public sector bank in the country, provides all kinds of loans, including loans against Fixed Deposits (FDs), to its customers. In today's world, everyone is in need of loans for different purposes like education, home, vehicles etc.
In that regard, SBI offers loans to its customers based on their fixed deposits without them having to break it. This initiative is quite beneficial for the ones who are looking to avail a loan as the rate of interest is quite low when compared to other kinds of loans that exist in the financial sector.
Eligibility Criteria for Availing Loan Against SBI FD
To be eligible for a loan against SBI fixed deposit, the criteria are as follows:
- The applicant needs to be above 21 years of age and must have a SBI FD account with the bank.
- The FD against which the loan is to be availed must not have matured when applying for the loan.
- Customers holding TDR/STDR/e-TDR/e-STDR with SBI individually can avail the facility.
- The ones who are registered with the bank in terms of depositing in RD/ e-RD/NRE/RFC/FCNR (B) are also eligible.
- Businesses can avail this facility only in the case of sole proprietorship or partnership firms.
Features of Loan Against SBI Fixed Deposit
The key features of loan against time deposits are as follows:
Type of loan available | Both demand and overdraft loans |
Channels available | Internet Banking as well as through branches |
Security | Granted on underlying fixed deposit |
Margin | Up to 90% of the value of the fixed deposit |
Processing fee | Nil |
Repayment period | The period is fixed based on the repayment capacity of the borrower. |
Interest rate | 1% above the relative fixed deposit rate |
Benefits of Loan Against SBI Fixed Deposit
Loan up to 90% of FD:
✔️ Individuals can avail loans up to 90% of the value of the term deposit.
✔️ Higher the amount of the deposit in the SBI fixed deposit, the better are the chances of securing a substantial amount as loan as and when the need arises.
Demand and overdraft loans available:
✔️ Both demand and overdraft loans are available and can be availed as per the needs of the individual.
✔️ For online overdraft loans against SBI FD, the minimum amount is Rs.25,000 while the maximum amount that can availed is Rs.5 crore.
✔️ The maximum amount can never exceed the 90 percent of the amount invested in SBI term deposit.
No processing fee or penalties:
✔️ No processing charges are levied on the individuals who avail loans against SBI fixed deposits and neither is there any prepayment penalties.
✔️ Considering these factors, loans drawn against SBI time deposits are quite popular among the ones who avail the facility.
✔️ With no processing fee and no penalties imposed on the borrower if he/she repays the borrowed amount before the scheduled time, the facility offers the customer a lot of breathing space when compared to other loans that the bank offers to its customers.
Interest rate charged is mere 1%:
✔️ The interest rate on the loan amount against the FD is just a mere 1% above the relative time deposit rate.
✔️ The interest rates are lower in comparison to other types of loans provided by the bank is because of the fact that the borrower already has a relation with the bank as well as for the reason that the loan falls under the secured category.
Repayment period is fixed based on the individual's repayment capacity:
✔️ Another benefit that the bank offers to the individuals who avail this facility is that the repayment period is fixed based on the repayment capacity of the borrower.
✔️ The maximum repayment time for SDTR/e-STDR is 5 years while for TDR/e-TDR, it is kept at 3 years for overdraft loans while it is done online.
✔️ In case the loan is availed at the branch, the bank officials determine the repayment period based on the borrower's capability to repay the borrowed amount.
Interest is provided on the FD:
✔️ Security interest is provided on fixed deposits.
✔️ This is another benefit as it helps the borrower earns interest on the existing fixed deposit.
✔️ It helps the individual in the long run by enabling him/her in repaying the borrowed amount against the existing fixed deposit.
How to Apply for State Bank of India Loan Against Fixed Deposits
Step 1: You have to log into the SBI online portal by using your login credentials.
Step 2: Select 'e-Fixed Deposit'.
Step 3: Choose 'Overdraft against Fixed Deposit'.
Step 4: All deposits that you have will be displayed. Choose one fixed deposit.
Step 5: Select 'Proceed'.
Step 6: Click on 'Submit'.
Step 7: Enter your high-security password. This will be sent to your registered mobile number.
Step 8: Your account will be opened.
Repayment Options for State Bank of India Loan Against Fixed Deposits
- A repayment schedule will be fixed by the bank for you based on your repayment capacity for the loan that you have taken via the SBI Bank branches.
- The maximum repayment period is 5 years against STDR/e-STDR. The period has been fixed at 3 years against TDR/e-TDR for Overdraft availed online.
Points to keep in mind if one intends to take loan against Fixed Deposits
- Loans are provided only against fixed deposits that are free of mortgage or impediment.
- Loans can't be availed from term deposits opened in the name of minors.
- In case the personal loan was availed from an FD that was opened jointly, all holders of the term deposit will have to bear the responsibility of repaying the borrowed amount.
- The borrower can't close or break the time deposit account after availing the loan.
- Banks reserves the right to close the FD account against which the loan was borrowed if the borrower fails to repay the amount he/she borrowed.
FAQs on Loan Against SBI FD
- How is the loan against SBI Fixed Deposit provided?
The loan is provided to the borrower in the form of an overdraft based on the amount deposited by the borrower in the fixed deposit.
- How to avail the facility online?
The facility can be availed by visiting onlinesbi.com and logging into internet banking by using the username and password. The details are available under the e-Fixed Deposit tab.
- How can I repay the loan?
One can repay the borrowed amount through internet banking or by visiting a SBI branch.
- Is demand loan facility also available?
Yes, the demand loan facility is available for the potential borrower.
- Can I avail 90% of my TDR/e-TDR as overdraft through the internet banking platform?
No, as of now you can avail only 75% of your TDR/e-TDR as overdraft.
- Are NRIs eligible for loans against fixed deposits?
Yes, they are eligible and can avail loans as long as their fixed deposit accounts are operational.
- Is the online overdraft facility available against Tax Saving and Recurring deposits?
No, the facility is not available with regards to Tax Saving fixed deposits and Recurring deposits.
- Can joint holders of a fixed deposit apply online?
No, joint holders of a fixed deposit account can't apply online. If they intend to apply for the loan, they need to do so by visiting a SBI branch.
- Is there a limit on the maximum amount when the facility is availed through SBI branch?
No, there isn't any limit on the maximum loan amount that can be availed by the borrower when he/she applies through the bank.
- Is the interest rate the same for all the applicants who wish to avail the facility?
No, it is not the same as interest rates vary from one another depending on the fixed deposit schemes.
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