Characteristics of the Loan Against a Canara Bank FD
- The interest rate on the loans is lower because your fixed deposit is being utilized as collateral. These loans have interest rates that are typically 2 to 2.5 per cent lower than those of personal loans. The corresponding monthly installments (EMIs) for these loans are thus smaller.
- Your KYC documentation has already been updated at the bank since you opened your FD. As a result, the paperwork needed for a loan against your FD will be modest. Since the bank already has this information, you won't be required to provide documents like proof of income, ITRs, or other tax returns.
- The highest loan amount you could receive if you need one will depend on several variables. These include your income, term, repayment plan, and credit score. However - in the case of a loan against an FD, the amount of money in the FD account determines the maximum loan amount. This implies that you will be qualified for a larger loan if your FD balance is higher.
- The bank will lose money on interest when you pay off a loan early, so they will penalize you. However, there is no early payment penalty when taking out a loan secured by an FD. This is so that the bank does not suffer financial loss from the interest.
- Before granting you any form of loan, the bank will verify your credit score (secured or unsecured). However, your CIBIL or credit score won't be used while establishing your eligibility for a loan secured by an FD. As a result, people with bad credit or no credit may be able to choose these loans. In addition, because they have not used credit cards, personal loans, or other facilities, many people do not have credit scores.
Also, check - Canara Bank FD Interest Rates
Eligibility for Canara Bank Loan Against FD Interest Rate
When applying for Loan Against FD in Canara Bank, you must meet the following requirements:
- The applicant for the secured loan must be a customer of the bank with which he or she is applying.
- All individuals who have fixed deposits, including joint fixed depositors.
- The candidate has to be an Indian citizen and a member of a Hindu Undivided Family, family trust, association, or society. Additionally, partnership firms, group companies, and single proprietorships can apply for the loan.
- A loan cannot be obtained with a 5-year tax-saving fixed deposit.
- A loan cannot be made on a fixed deposit held in a minor's name.
Benefits of Taking a Loan Against Your Canara Bank FD
The advantages of obtaining a loan against FD for an account holder are as follows.
- You are not required to prematurely withdraw funds from an FD while taking out a loan against it. However, by doing this - you can avoid paying the penalty interest for an early withdrawal.
- Not processed Fee for processing loans.
- decreased interest rate
- Simple and efficient loan processing procedure
- The loan is given in exchange for both local and NRI fixed deposits.
Online Procedure to Apply for a Loan Against FD from Canara Bank
Here are the steps to apply for a loan against FD from Canara Bank:
- Step 1: Enter your login information to access the Canara Bank net banking portal.
- Step 2: Select the type of deposit account by clicking "New Account" on the "Term Deposit" page.
- Step 3: Give all the necessary details, including your name, payment information, instructions for the maturity date, etc.
- Step 4: By selecting "Open Deposit," you can confirm the information.
- Step 5: Then select "Confirm."
How to Apply for Loan Against FD in Canara Bank Offline?
To apply for a loan against your fixed deposit, visit the Canara Bank office closest to you with all the necessary documentation.
Customer Support's Help to Avail a Loan Against FD
- If you live in India and want to apply for a loan against a fixed deposit, you could also call one of the following customer service numbers: 1800 425 0018, 1800 103 0018, 1800 208 3333, or 1800 3011 3333.
- You must dial +91-80-22064232 if you are an NRI and want to use this service.
- You will be contacted by a customer service representative who will assist you with the loan against the fixed deposit application process.
FAQs
Q1. What would happen if I am unable to make my loan against FD EMI payments?
The bank will utilize the remaining amount in your FD to cover your unpaid EMIs.
Q2. What is the deadline for repaying a loan secured by an FD?
Before the fixed deposit matures, the debt secured by it must be paid back. The fixed deposit period cannot be exceeded by the loan repayment due date.
Q3. What costs are involved in borrowing money against a fixed deposit?
There are no processing costs when taking out a loan against a savings or fixed deposit account. However, a loan interest rate is assessed, typically 2 to 3 percentage points more than the FD interest rate.
Q4. I'm an older person. Can I make a loan application against a bank FD?
You may apply for a loan secured by your FD.
Q5. How to get a loan against my FD from Canara Bank?
You can choose to do it online or offline by visiting the bank.