Canara Bank Loan Against FD

What is a Canara Bank Loan Against FD?

Canara Bank loan against fixed deposit offers a convenient way to access funds without closing your deposit. This facility allows you to get a loan against FD while your fixed deposit continues to earn interest, making it useful for managing urgent financial needs. The application process is simple, requires minimal paperwork, and doesn’t need additional security.

Key Features of Canara Bank Loan Against FD

Below are some key features of the Canara Bank loan against fixed deposit that explain how the facility works:

• Instant Access: You can instantly get the loan against FD through Canara Bank NetBanking if the deposit is made in a single name.
• Pay Interest Only on Used Amount: With the Canara Bank loan against FD, you pay interest only on the amount you use. The rest of your fixed deposit continues to earn as per the applicable Canara Bank FD interest rates, helping you manage funds without affecting your overall savings.
• No Need to Close Your FD: The loan on FD helps you cover household or business expenses while keeping your fixed deposit active.
• Wide Eligibility: Canara Bank loan against FD is available to resident individuals with single or joint accounts, Hindu Undivided Families (HUF), firms, and companies.

How to Apply for a Canara Bank Loan Against FD?

Applying for a Loan against FD at Canara Bank is quick and simple through NetBanking or by visiting a branch.

1. Online Loan Application 

   To apply for a Loan against FD online, follow these simple steps:

   • Step 1: Log in to NetBanking: Use your Customer ID and password to log in to Canara Bank’s NetBanking.
   • Step 2: Navigate to Deposits: Go to the ‘Deposits’ section and select ‘Fixed Deposit’ to view all your active deposits.
   • Step 3: Select the FD: Choose the fixed deposit you wish to link for the overdraft.
   • Step 4: Choose the Facility: Select the ‘Loan/Overdraft against FD’ option.
   • Step 5: Complete the Request: Review the details and confirm. The overdraft will be set up instantly for single-name deposits.
   • Step 6: Activation: Once confirmed, your loan against FD will be activated immediately.

2. Offline Loan Application 

   To apply offline at a Canara Bank branch, here’s what you need to do:

   • Step 1: Visit the Nearest Branch: Go to your nearest Canara Bank branch with your FD receipt.
   • Step 2: Fill the Request Form: Complete the ‘Loan Against FD’ request form provided at the branch.
   • Step 3: Sanction of Overdraft: In most cases, the overdraft will be sanctioned the same day.
   • Step 4: Verification: The bank will verify your details before processing your application.
   • Step 5: Loan Approval: The loan will be approved and processed once verified.
   • Step 6: Access to Funds: After approval, you can access your loan against the FD.

Who Should Consider a Canara Bank Loan Against an FD?

The Canara Bank loan against FD suits a wide range of customers. Here are some groups that can benefit from this facility:

• Investors with Tax-Saving FDs: Since tax-saving FDs have a 5‑year lock-in, the loan helps you access funds without closing the deposit.
• Individuals Facing Short-Term Cash Needs: Suitable for covering urgent needs like medical expenses, education fees, or travel.
• Small Business Owners and Self-Employed Professionals: Useful for managing working capital or short-term operational costs.
• People Avoiding High-Interest Loans: Best for those who want to avoid costly personal loans or credit card debt.
• Existing Canara FD Customers: If you already have a Canara FD, getting an overdraft is simple, especially if linked to NetBanking.

Repayment Options for Canara Bank Loan Against FD

The Canara Bank loan against FD offers flexible repayment choices that make it easy to manage your finances:

• Repay Anytime: You have the flexibility to repay in EMIs or pay the entire amount whenever convenient.
• Pay Interest Only on Used Amount: Interest is charged only on the withdrawn amount, helping you save on borrowing costs.
• Multiple Payment Modes: Repayment can be done through NetBanking, NEFT, UPI, or branch deposit.
• Partial or Full Repayment: You can repay the loan in installments or clear the full amount at once.
• Automatic Adjustment on FD Closure: If the FD matures or is closed, the outstanding loan amount is automatically settled from the FD proceeds.

Key Takeaways

Loan against FD Canara Bank lets you access up to 90% of your deposit while your fixed deposit earns interest. It’s a simple and convenient way to meet urgent needs, with a seamless process through NetBanking or by visiting a branch. There’s no need for additional security, as your FD itself acts as the collateral.