AU Small Finance Bank Loan Against FD

What is an AU Small Finance Bank Loan Against FD?

AU Small Finance Bank loan against fixed deposit lets you use your FD as collateral to access funds at a lower interest rate than unsecured loans. A loan against FD is available on eligible AU Small Finance Bank FDs, with the loan amount determined by your deposit’s value and tenure. Your FD remains intact and continues earning interest at the agreed rate, while you repay the loan separately. 

Key Features of AU Small Finance Bank Loan Against FD

Here are some of the most important features that make the loan on FD facility from AU Small Finance Bank useful:

• Withdraw as Needed, Pay Interest Only on Usage: Through the overdraft facility, customers can access funds in part or in full as required. The interest applies solely to the amount actually withdrawn and for the duration it remains outstanding.
• Cost-Effective Borrowing: Interest rates are just 2% above the AU Small Finance Bank FD interest rate, significantly lower than personal loans, helping you save on borrowing costs.
• Preserve FD Earnings: Borrowers can meet financial needs without prematurely breaking their fixed deposit, allowing it to continue accruing interest until maturity.
• Instant Liquidity: Upon approval, funds are made available without delay, ensuring quick access for urgent requirements.
• Convenient Application Modes: Customers may apply for the facility through the bank’s digital channels or by visiting the nearest branch, according to their preference.

How to Apply for an AU Small Finance Bank Loan Against FD?

Applying for an AU Small Finance Bank loan against FD is simple and can be done online and offline.

1. Online Loan Application

   You can easily apply for an AU Small Finance Bank Loan Against FD online by following these steps:

   • Log In: Access AU Small Finance Bank’s internet or mobile banking app.
   • Go to the Loan Section: Select “Loan Against FD” from the available options.
   • Select FD: Choose the fixed deposit you wish to pledge.
   • Enter Details: Provide the desired loan amount and tenure (up to your FD maturity date).
   • Submit Request: Review and confirm your application.
   • Loan Disbursal: The loan amount will be credited to your linked account upon approval.

2. Offline Loan Application

   To apply for an AU Small Finance Bank Loan Against FD through a branch, follow these steps:

   • Visit the Branch: Go to your nearest AU Small Finance Bank branch where you hold the FD.
   • Request Loan Service: Inform the bank you want to take a loan against your FD.
   • Fill Application Form: Complete the form provided by the bank.
   • Submit Documents: Provide your FD receipt and valid KYC documents (ID proof, address proof, PAN card).
   • Verification & Approval: The bank will verify your details and sanction the loan.
   • Loan Disbursal: The approved loan amount is credited directly to your account.

Who Should Consider an AU Small Finance Bank Loan Against FD?

A loan on FD from AU Small Finance Bank is a practical way to meet different financial needs without disturbing your investment. It’s especially useful for:

• Investors with Tax-Saving FDs: Tax-saving FDs have a fixed 5-year lock-in period, but instead of breaking them, you can opt for a loan against FD. This way, you get the funds you need while your deposit stays active and earning interest.
• Individuals with Short-Term Cash Needs: If you require money for medical bills, education fees, travel expenses, or any urgent need, a loan against FD offers a quick solution.
• Small Business Owners and Self-Employed Professionals: This option helps you meet working capital requirements or cover short-term business expenses while ensuring your cash flow remains uninterrupted.
• Those Avoiding High-Interest Borrowing: Since the FD acts as collateral, the loan carries lower interest rates than personal or credit cards, making it a more affordable borrowing choice.

Repayment Options for AU Small Finance Bank Loan Against FD

AU Small Finance Bank offers flexible repayment options for a Loan Against FD to suit your needs as follows:

• Fixed Tenure Alignment: Repayment schedule aligns with FD maturity date, ensuring smooth and timely loan settlement.
• Interest-Only Repayments: Pay only the interest during the tenure and clear the principal in a single maturity payment.
• Automatic Adjustment at Maturity: Unpaid dues are recovered directly from the FD maturity proceeds without additional follow-up.
• EMI Option: Repay principal and interest through fixed monthly installments over the agreed loan tenure.
• Lump-Sum Payment: Clear the full outstanding amount, including interest, in a single payment before FD maturity.

Key Takeaways

AU Small Finance Bank loan against FD gives you easy access to funds while keeping your deposit intact. You can borrow up to 85% of your FD value at interest rates slightly above yours. The process is quick, requires minimal paperwork, and offers flexible repayment options, making it suitable for individuals, self-employed professionals, and business owners with urgent financial needs.