Does loan against FD affect my CIBIL score?

Yes positively if repaid on time. Reported as secured loan. On-time repayment builds credit history. Defaults allow lender to liquidate the FD.

What happens if I cannot repay loan against FD?

Bank liquidates the FD and adjusts outstanding loan amount. Remaining FD balance returned to you. Low risk for lenders hence the low rate.

Can I prepay loan against FD without penalty?

Most lenders allow penalty-free prepayment. Confirm with your lender. Prepaying releases the lien on your FD immediately.

Loan Against FD in India 2026: Get Instant Cash at Just 1–2% Above Your FD Rate

Q: Can I get a loan against someone else's FD?

Only if you are a joint holder on that FD. For FDs held solely by another person they must be the applicant. Third-party FDs are not accepted.

Your Fixed Deposit is not just a savings instrument — it is instant loan collateral. A loan against FD in India 2026 lets you borrow up to 90% of your FD value at just 1–2% above your FD interest rate. No CIBIL score check, no income proof, no documents beyond the FD receipt. If your FD earns 7% p.a., your loan costs just 8–9% p.a. — cheaper than almost any other loan in India. Your FD continues earning interest throughout.

90%Of FD value available as loan

1–2%Above FD rate — net cost

No CIBILScore required

Same dayApproval & disbursal

How Loan Against FD Works

When you take a loan against your fixed deposit, the bank or NBFC places a lien on your FD — meaning you cannot withdraw it until the loan is repaid. However, your FD continues to earn interest at the original rate throughout the loan period. The loan interest you pay minus the FD interest you earn = your actual net cost of borrowing.

Example: FD of ₹5 lakh at 7% p.a. → Loan of ₹4.5 lakh (90% LTV) at 8.5% p.a. → Your net cost = 8.5% – 7% = just 1.5% p.a. effectively. That is the cheapest loan available in India for anyone with a fixed deposit.

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Loan Against FD vs Personal Loan — Full Comparison

Feature	Loan Against FD	Personal Loan (Pragati)
Interest Rate	FD rate + 1–2% (≈7–9%)	9.99% p.a. onwards
CIBIL Score Required	Not required	700+ needed
Income Proof Required	Not required	Salary slip or ITR needed
Maximum Amount	90% of FD value	₹5 Crore
FD Earning	FD continues earning interest	Not applicable
Approval Speed	Same day	4–24 hours
Best For	Low CIBIL / urgent need / cheapest rate	Large amounts beyond FD value

If your need exceeds 90% of your FD value, use a loan against FD to cover what you can — and top up with a personal loan from Pragati Loan for the balance. This blended approach minimises your overall interest cost.

🧮 Calculate Loan Cost vs FD Return

How Much Can You Borrow Against Your FD? — 2026 Table

FD Amount	FD Rate	Max Loan (90% LTV)	Loan Rate (FD+2%)	Net Cost After FD Earnings
₹1,00,000	7%	₹90,000	9% p.a.	~2% p.a.
₹3,00,000	7.25%	₹2,70,000	9.25% p.a.	~2% p.a.
₹5,00,000	7.5%	₹4,50,000	9.5% p.a.	~2% p.a.
₹10,00,000	7.5%	₹9,00,000	9.5% p.a.	~2% p.a.
₹25,00,000	7.75%	₹22,50,000	9.75% p.a.	~2% p.a.

Never break your FD prematurely to fund an expense — you lose interest and pay a penalty. A loan against FD costs just 2% net while keeping your FD intact and earning. Breaking a 3-year FD early can cost you 0.5–1% penalty plus all accrued interest for that period.

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Documents Required for Loan Against FD

FD Receipt / Certificate: Original FD receipt or digital FD certificate from your bank
KYC: Aadhaar Card + PAN Card (for loan above ₹50,000)
Application Form: Lender’s loan application form — most banks have pre-filled forms for existing FD customers
Photograph: Passport-size photo (physical application only)

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Frequently Asked Questions

Can I get a loan against someone else’s FD?

You can get a loan against an FD held jointly with you as a joint holder. For FDs held solely by another person, they must be the loan applicant — you can be a co-applicant. Third-party FDs (someone else’s FD entirely) are generally not accepted as collateral for personal loans.

Does taking a loan against FD affect my CIBIL score?

Yes — in a positive way if repaid on time. The loan is reported to CIBIL as a secured loan. Regular on-time repayment improves your credit history. Missing payments, however, will reduce your score and may allow the lender to liquidate (break) your FD to recover dues.

What happens if I cannot repay the loan against FD?

If you default, the bank has the right to liquidate (break) your FD and adjust the outstanding loan amount against it. Any remaining FD balance after loan recovery is returned to you. This makes loan against FD very low risk for lenders — hence the low interest rate.

Can I prepay a loan against FD without penalty?

Most lenders allow prepayment without penalty on loan against FD — since the FD itself is already pledged. Confirm with your specific lender. Prepaying early releases the lien on your FD immediately, restoring full access to your savings.

Have an FD? You already have the cheapest loan in India. Borrow at just 2% net effective rate — no CIBIL check, same-day approval, FD keeps earning. Need more than your FD allows? Pragati Loan personal loans from 9.99% p.a. cover the rest.

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