IDFC First Bank Loan Against FD: Rates and Process

IDFC First Bank Loan Against FD: Rates and Process

IDFC First Bank offers a loan or overdraft against your Fixed Deposit, letting you access up to 90% of the FD value without breaking the deposit. Interest is charged only on the amount you use, and your FD continues to earn interest at the original rate.

Key Features

• Loan amount: Up to 90% of the FD value.
• Interest rate: Typically 1% to 2% above the FD rate.
• No need to break the FD prematurely.
• Processing is fast, often same-day for existing customers.
• Overdraft facility available for flexible withdrawals up to the approved limit.

How to Apply

Through the IDFC FIRST Bank App

1. Log in to the IDFC FIRST Bank app.
2. Go to Loans or My Deposits.
3. Select the FD you want to pledge.
4. Tap Loan Against FD and follow the prompts.
5. The loan amount is credited to your savings account.

At the Branch

1. Visit your nearest IDFC First Bank branch.
2. Submit a loan against FD application form with the FD receipt.
3. The branch will process the loan and disburse the amount.

Eligibility

• Resident individuals holding a domestic FD with IDFC First Bank.
• The FD must typically have a minimum tenure remaining (usually 3 months or more).
• NRE/NRO FD holders may also be eligible. Check with the branch for NRI-specific rules.

Benefits Over Breaking the FD

If you break an FD before maturity, you lose the promised interest rate and may face a penalty. A loan against FD lets you meet your cash need while the FD continues earning. The net cost (loan interest minus FD interest) is usually only 1% to 2%.

Key Takeaways

• Borrow up to 90% of your FD value without breaking it.
• Effective cost is just 1% to 2% over your FD rate.
• Available as a term loan or overdraft facility.
• Apply through the app in minutes or visit a branch.

FAQ

Does taking a loan against FD affect my credit score?

A loan against FD is a secured loan backed by your own deposit. It is reported to credit bureaus and, if repaid on time, can actually improve your credit score. Defaults, however, will impact it negatively.

What happens if I cannot repay the loan against FD?

If you default, the bank has the right to liquidate (break) the FD to recover the outstanding loan amount. Any remaining amount after recovery is returned to you.

Can I take a loan against a joint FD?

Yes, but typically all joint holders must consent to the pledge. Visit the branch with all account holders to complete the formalities.