A Complete Guide to Getting a Loan Against Fixed Deposit

If you have a Fixed Deposit (FD) and need urgent funds, there’s good news — you don’t have to break your FD.

Instead, you can get a loan against it.

This smart borrowing option helps you access money quickly without compromising your savings.

Whether you're a salaried professional, business owner, or investor, a loan against FD can offer short-term liquidity at affordable interest rates.

Key Takeaways

• A loan against FD lets you borrow without breaking your deposit.
• Interest rates are lower compared to personal loans.
• Approval is fast, documentation is minimal, and your FD keeps earning.
• Quicklend offers a seamless digital process to apply for this loan.

What Is a Loan Against FD?

A simple explanation of how it works

• What does it mean?

A loan against FD is a secured loan where you pledge your Fixed Deposit as collateral. The lender gives you a credit limit (usually 75% to 95% of your FD value) while your FD continues to earn interest.

• How is it different from other loans?

Unlike personal loans, this loan doesn’t require a credit check or income proof. Since it's backed by your FD, it’s easier to get and comes with lower interest rates.

• Who can apply for it?

Any individual with a valid Fixed Deposit — whether a salaried employee, self-employed professional, or senior citizen — can apply. Joint FD holders must apply together.

• How much can you get?

Most banks and lenders offer 75% to 90% of your FD amount as a loan. For example, if you have an FD of ₹2,00,000, you could get up to ₹1,80,000 in credit.

Why Should You Consider It?

A look at key benefits for borrowers like you

• Keep your FD intact

Breaking an FD early often leads to penalties and loss of interest. With a loan, your FD stays untouched — it continues earning.

• Pay less interest than personal loans

Since it’s secured, the interest rate is much lower — often just 1.5% to 3% higher than the FD’s rate.

• No need for credit history

Have a low credit score or no credit profile? No problem. The FD acts as security, so lenders are more flexible.

• Quick, easy, and secure

Loan approval is fast — sometimes within hours. The process is simpler than unsecured loans, especially with fintech lenders like Quicklend.

How Much Will It Cost You?

Breaking down the charges and repayment details

• Loan interest rate vs. FD interest

If your FD earns 6.5%, your loan might carry 8%–9.5% interest. This still beats typical personal loan rates, which often cross 12–15%.

• Other charges and fees

Processing fees are low — around ₹500 to ₹1,000 — and prepayment penalties are usually nil.

• Repayment options available

You can:

• Pay regular EMIs
• Pay only interest and settle principal later
• Use overdraft facility (only on select FD-linked loans)
• What happens if you default?

If you can’t repay, the lender has the right to liquidate your FD and recover dues. No legal notices or credit damage if handled transparently.

When Does It Make Sense?

Use-cases where this type of loan is helpful

• Short-term cash needs

Got a medical emergency? Education fee? Wedding expense? This loan helps you cover it without breaking your FD.

• Business or medical emergency

If you’re a business owner facing a working capital crunch, this option offers quick funding with minimal documentation.

• Not eligible for unsecured loans

If your income isn’t consistent or you don’t have a strong credit history, this loan gives you access to credit anyway.

• Looking for fast loan approval

With lenders like Quicklend, your loan can be approved and disbursed in under 24 hours — all digital, no branch visits.

How Can You Apply Easily?

Steps to get started with your application

• Documents you’ll need

You’ll typically need:

• PAN card
• Aadhaar card
• FD receipt or certificate
• Bank account details

• Minimum FD amount required

Many lenders offer loans against FDs starting from ₹25,000 to ₹50,000. Higher the deposit, more the loan eligibility.

• Online vs offline process

Banks may require branch visits. But digital-first lenders like Quicklend let you apply online — paperless, instant, and hassle-free.

How Quicklend simplifies it for you

With Quicklend, the entire process is:

• Paperless
• Fast (approval within hours)
• Transparent (no hidden charges)

Conclusion

A loan against FD is a smart way to borrow without letting go of your savings. It's safe, quick, and cost-effective — perfect for planned or unexpected financial needs.

Whether you're facing an urgent expense or looking for liquidity without risk, this option could work in your favor.