What will be the loan amount for loan against deposits and repayment period?

Find out the loan amount you can avail against your deposits and the repayment period. Get details on eligibility, interest rates, and terms for loan against fixed deposits (FDs) or other savings.

May 11, 2025 - 18:07 Updated: May 11, 2025 - 20:50

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What will be the loan amount for loan against deposits and repayment period

Loan Against Deposits in India: Loan Amount and Repayment Period

Loan against deposit (commonly, loan against Fixed Deposit or FD) is a secured credit facility where you can borrow funds by pledging your FD as collateral, without breaking the deposit. Here’s a comprehensive overview for Indian customers:

Loan Amount

Loan Limit: Most Indian banks offer loans up to 90%–95% of your FD value. The exact percentage depends on the bank’s policy:
- State Bank of India (SBI): Up to 90% of FD amount.
- Bank of Baroda: Up to 95% of FD amount.
- Axis Bank, Kotak Mahindra, HDFC Bank, Yes Bank, PNB, Canara Bank: Typically up to 85%–90% of FD value.
- Minimum Loan Amount: Generally starts from ₹25,000 for most major banks.
- Maximum Loan Amount: Can go up to ₹5 crore for SBI.
Eligibility: Available to individual and joint FD holders (excluding minors and tax-saving 5-year FDs)

Some banks, such as SBI Bank, use a collateral acknowledgment ratio (e.g., 95%) to determine the maximum loan amount, which is calculated as:

$Loan Amount = Collateral Value \times Collateral Acknowledgement Ratio$

The final loan amount is typically rounded down to the nearest allowed unit.

Repayment Period

Tenure: The repayment period for a loan against FD is flexible but cannot exceed the remaining maturity period of the underlying FD.
- SBI: 3 to 5 years, subject to the FD’s maturity date.
- Bajaj Finance: Up to 36 months or until the FD matures, whichever is earlier.
- Other Banks: Typically, the maximum tenure is the FD’s maturity date, so if your FD matures in 2 years, your loan must be repaid within that period.
Repayment Mode: Most banks offer the loan as an overdraft facility, where you pay interest only on the amount utilized, or as a demand loan, where you repay in EMIs or a lump sum before FD maturity.

Interest Rate

Interest Charged: Usually 0.5% to 2% above your FD interest rate.
- SBI: 1% above the FD rate.
- Bajaj Finance: 2% above the FD rate.
- Axis, HDFC, Federal Bank: 2% above the FD rate.

Key Features

No Processing Fees: Most banks do not charge processing fees for loans against FD.
No Credit Check: Since the FD acts as collateral, credit checks are generally not required.
Continued FD Interest: Your FD continues to earn interest during the loan period.
Quick Disbursal: Loans are processed quickly, often instantly via net banking or mobile apps.

Summary Table

Bank	Loan Amount Limit	Repayment Period	Interest Rate
SBI	Up to 90% of FD (₹25k–₹5cr)	3–5 years, up to FD tenure	1% above FD rate
Bank of Baroda	Up to 95% of FD	Up to FD tenure	Typically 1–2% above FD
HDFC, Axis, Federal	Up to 85–90% of FD	Up to FD tenure	2% above FD rate
Bajaj Finance	Up to 75–90% of FD	Up to 36 months/FD tenure	2% above FD rate
Bank of Maharashtra	Up to 90% of FD	Up to FD tenure	Lower than personal loans

Eligibility Criteria for Availing Loan Against Fixed Deposit

To be eligible for a loan against FD, the basic criteria is that you must hold a fixed deposit with the bank you are availing the loan from and any of below-given individuals/entities can avail the loan:

Resident Indian citizens
Family Trusts
Hindu Undivided Family (HUF)
Clubs, societies, and associations
Sole proprietorships, group companies, and partnership firms

Documentation Required to Avail Loan Against Fixed Deposit (FD)

To avail a loan against fixed deposit, you will need to provide the below-given documents:

Application form duly signed
Duly signed agreement
Fixed/Term Deposit receipts duly discharged in favor of the bank

Please note that these may vary from lender to lender.

How to Obtain Loan Against Fixed Deposit

With a few exceptions, most lenders let you apply online for a loan against a set deposit. These include situations where you must visit the bank's closest branch. You can apply online through the websites of State Bank of India, HDFC Bank, Axis Bank, and Deutsche Bank for a loan against a fixed deposit, among other banks. You must visit the closest branch of Federal Bank in this instance.

Typical Processing Time for Loans Against Fixed Deposits in India

Instant and Hassle-Free Disbursal

The processing time for loans against fixed deposits (FDs) in India is extremely fast, often described as "instant" or "nil" waiting period. Many leading banks and non-banking financial companies (NBFCs) have digitized the entire process, allowing customers to apply and receive funds online with just a few clicks. This means that, in most cases, there is no paperwork or lengthy approval process involved.

Online and Offline Application

Online Application: If you are an existing FD holder, you can log in to your bank or NBFC’s customer portal or mobile app, select your FD, and initiate a loan against it. The funds are typically credited to your linked bank account within 24 hours, and in some cases, the disbursal is immediate.
Offline Application: If you prefer, you can visit your bank branch. Even in this case, the process is quick, and funds are usually disbursed within a day after submitting the required form and FD receipt.

Why Is the Processing So Fast?

FD as Collateral: Since the fixed deposit is already held by the bank or NBFC and serves as collateral, there is minimal risk assessment or documentation required.
Minimal Documentation: For most institutions, no additional documents are needed if you are an existing customer. Some may require a simple application form or OTP verification online.
Automated Systems: Many banks have automated the process, making it possible to get the loan amount credited almost instantly after application.

Summary Table

Mode of Application	Typical Processing Time
Online (Netbanking/App)	Instant to within 24 hours
Offline (Branch Visit)	Within 24 hours

Key Takeaways

Loans against fixed deposits are among the fastest to process in India.
With online facilities, funds can be disbursed instantly or within 24 hours of application.
The process is seamless, requiring minimal or no paperwork, making it ideal for urgent financial needs.

This rapid turnaround makes loans against FDs a preferred choice for those seeking quick liquidity without breaking their deposit.

Features and Benefits of Loan Against Fixed Deposit

1. Lower Interest Rates

Loans against fixed deposits (FDs) come with significantly lower interest rates compared to unsecured loans like personal loans.
Typically, the interest rate is just 1% to 2% above your FD rate, making it 2% to 2.5% lower than most personal loan rates.
This translates to lower EMIs, reducing your overall repayment burden.

2. Minimal Documentation and Quick Processing

Since your FD is already with the bank, the documentation required is minimal-usually just your FD receipt and basic KYC documents.
The approval and disbursal process is fast, often instant, as the loan is secured by your existing FD.

3. No Credit Score Check

Lenders generally do not check your credit score or CIBIL report for loans against FDs.
This makes it an accessible option for individuals with low or no credit history.

4. High Loan Amount Eligibility

The maximum loan amount is directly linked to the value of your FD, typically up to 75%–90% of the FD amount depending on the bank.
The higher your FD, the larger the loan you can avail.

5. Flexible Repayment Options

Repayment tenure is flexible and usually matches the remaining maturity period of your FD, often ranging from 1 month up to 5 years.
Many banks offer overdraft facilities, so you only pay interest on the amount utilized and can repay in a lump sum or as per your convenience.

6. No Prepayment or Foreclosure Charges

There are generally no penalties for prepaying or foreclosing the loan before the end of the tenure.
You can close your loan early without any extra cost, unlike many other loan products.

7. Continued FD Benefits

Your FD continues to earn interest during the loan period, so you don’t lose out on returns.
The FD is only liquidated if you default on the loan repayment.

8. Zero or Low Processing Fees

Many banks and NBFCs do not charge any processing fees for loans against FDs, making them more cost-effective.

Summary Table

Feature	Details
Interest Rate	1%–2% above FD rate (lower than personal loans)
Loan Amount	Up to 75%–90% of FD value
Documentation	Minimal (FD receipt, KYC)
Credit Score Requirement	Not required
Processing Time	Instant to a few hours
Repayment Tenure	Up to FD maturity (1 month–5 years)
Prepayment/Foreclosure Charges	None
Processing Fees	Usually none
FD Status During Loan	Remains active and continues to earn interest

Key Takeaways:

Cost-effective: Lower interest rates and no hidden charges make loans against FD an economical borrowing option.
Accessibility: Ideal for those with low credit scores or urgent funding needs, as approval is quick and hassle-free.
Flexibility: High loan amounts, flexible repayment, and no prepayment penalties provide maximum convenience.

A loan against fixed deposit is a smart way to access funds quickly without breaking your investment or incurring high borrowing costs.

Can You Get a ₹2 Lakh Loan Repayable Over Three Years? Detailed Explanation

Yes, you can easily avail a personal loan of ₹2 lakh with a repayment tenure of three years from most leading banks and NBFCs in India. Here’s a comprehensive guide on how it works, what to expect, and how to plan your repayments.

Loan Amount and Tenure

Most banks and financial institutions offer personal loans starting from ₹50,000 up to ₹40 lakh or more, so a ₹2 lakh loan is well within the standard range.
You can choose a repayment period that suits your needs, and three years (36 months) is a commonly available tenure with most lenders.

Interest Rates

Interest rates for personal loans typically start from around 10.5% per annum and can go up to 24% or higher, depending on your credit profile, income, and the lender’s policies.
For example, Kotak Mahindra Bank offers rates starting at 10.99%, while Axis Bank starts at 11.25% per annum.

EMI and Repayment Details

For a ₹2 lakh loan over three years, your monthly EMI will depend on the interest rate.
At an interest rate of 9.99% per annum, the approximate EMI is ₹7,031 per month.
At 11% per annum, the EMI is around ₹6,548 per month, with a total repayment of ₹2,35,719 over three years.
You can use online personal loan EMI calculators to get precise figures based on your chosen interest rate and tenure.

Application Process

Online Application: Most banks and NBFCs allow you to apply online through their websites or mobile apps. The process is quick, often requiring just a few minutes for approval and a few hours for disbursal if you meet the eligibility criteria.
Documents Required: You typically need to provide identity proof, address proof, income proof (salary slips or bank statements), and sometimes employment details1.
Eligibility: Lenders assess your credit score, monthly income, and job stability before approving the loan.

Key Features and Benefits

No Collateral Needed: Personal loans are unsecured, so you don’t need to pledge any assets.
Flexible Usage: There are no restrictions on how you use the loan amount-it can be for medical emergencies, travel, education, home renovation, or any other legal purpose.
Quick Disbursal: Once approved, the loan amount is usually credited to your bank account within a few hours to a day1 37.
Flexible Repayment: You can select a tenure ranging from 1 to 6 years, with most lenders allowing prepayment or foreclosure options (sometimes with a small fee).

Summary Table: ₹2 Lakh Personal Loan for 3 Years

Parameter	Typical Value/Range
Loan Amount	₹2,00,000
Tenure	3 years (36 months)
Interest Rate	10.5% – 22% p.a.
EMI (approx.)	₹6,548 – ₹7,031
Total Repayment	₹2,35,719 – ₹2,53,116
Processing Time	Instant to a few hours (online)
Collateral	Not required
Usage Restrictions	None

How to Plan Your Repayment

Use an online EMI calculator to choose a tenure and EMI that fit your monthly budget.
Compare interest rates and processing fees across lenders to get the best deal.
Ensure timely repayments to maintain a good credit score and avoid penalties.

Conclusion:

For Indian customers, you can typically borrow up to 90%–95% of your FD amount as a loan or overdraft, at an interest rate 0.5%–2% above your FD rate. The repayment period cannot exceed the FD’s maturity, often ranging from 1–5 years depending on the bank and your FD’s tenure. This facility is quick, requires minimal documentation, and helps you meet urgent financial needs without breaking your FD.