In the time of emergencies, the person requires immediate access to the funds. Emergencies like unexpected medical expenses, home repair, and educational expenses require sudden cash flow. During these times of cash crunch, the person wants hassle-free access to funds without disturbing long-term savings. For people who have invested in fixed deposits, a loan against a fixed deposit is a practical option to get cash in their hands during times of need. It allows you to get a loan at a lower interest rate than other secured loans. In this article, we will dig into how a loan against a fixed deposit works, what its benefits are, and the risks involved in taking a loan against the FD plan.<\/p>\n
Pros of Loan Against Fixed Deposit (LAD):<\/span><\/p>\n \u2705 Borrow up to 75\u201390\u202f% of your FD value without breaking it.<\/span><\/p>\n<\/li>\n \u2705 Interest is only ~1\u20132\u202f% above your FD rate, lower than unsecured loans.\u00a0<\/span><\/p>\n<\/li>\n \u2705 Keep earning interest on your FD while the loan is active.<\/span><\/p>\n<\/li>\n \u2705 Fast approval with minimal paperwork and no prepayment penalty.<\/span><\/p>\n<\/li>\n \u2705 Credit score is less critical since the loan is collateral-backed.<\/span><\/p>\n<\/li>\n<\/ul>\n Cons of Loan Against Fixed Deposit:<\/span><\/p>\n \u26a0\ufe0f Withdrawing or defaulting triggers interest penalties and may forfeit FD returns.<\/span><\/p>\n<\/li>\n \u26a0\ufe0f If you fail to repay on time, the bank can liquidate the FD, affecting your credit score.<\/span><\/p>\n<\/li>\n<\/ul>\n Final Note:<\/span>\u00a0Consider using the PayMe app for a loan against your fixed deposit. It’s ideal for emergencies when you want quick access to funds\u00a0<\/span>without breaking your FD<\/span>. It\u2019s fast, affordable, and preserves your savings. Use the PayMe\u00a0<\/span>Personal Loan app\u00a0<\/span><\/a>now to apply in minutes!<\/span><\/p>\n\n
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