ESAF Small Finance Bank Loan Against FD

Understanding the ESAF Small Finance Bank Loan Against FD

ESAF Small Finance Bank loan against FD is a secured loan in which you borrow money by pledging your fixed deposit. The bank gives you a loan or an overdraft facility instead of closing your FD and losing interest on it. Your FD is active, and it earns interest during the tenure. You pay interest only on the amount that you have borrowed, which makes it cost-effective as compared to unsecured loans. A loan against FD will give you access to money when you need it urgently and at the same time save your savings, hence it is very convenient in case of a financial emergency or when you need urgent funds.

Key Features of ESAF Small Finance Bank Loan Against Fixed Deposit

Here are the main features of an ESAF Small Finance Bank loan against FD:

• Competitive FD Interest Rates: ESAF Small Finance Bank offers FD interest rates that vary by tenure and customer type, roughly from 2.75% to 7.60% per annum for regular customers and up to 8.10% per annum for senior citizens. When a Loan against an FD is taken, the FD keeps earning its agreed rate, and the borrower pays a small extra margin above that rate on the loan.
• Linked to Regular Fixed Deposit: The loan or overdraft is given against an ESAF regular fixed deposit. The FD has a low entry amount, flexible tenure from 7 days to 10 years, and options like reinvestment and nomination, while a lien can be placed on it to back the loan.
• Liquidity: The FD is not closed; it only gets line-marked and stays in the same place for the full tenure. This helps the customer handle short-term money needs while the FD remains a long-term savings tool and continues to earn interest.
• Deposit Insurance and Safety: ESAF Small Finance Bank is covered by DICGC deposit insurance. It is applicable to eligible deposits in the bank, with limits being applied.

How to Apply for a Loan Against FD ESAF Small Finance Bank

It is easy to apply for a loan against an FD with ESAF Small Finance Bank. Customers can either go through digital platforms or visit a nearby branch, depending on what feels more comfortable.

Online Application Process

Customers who use ESAF Small Finance Bank internet banking or the mobile app can often start the loan request online. The steps are:

• Log In: Log in to ESAF Small Finance Bank Internet banking or the mobile app.
• Check FDs: Open the Deposits section and check your active FDs
• Choose FD: Select the FD as collateral.
• Confirm Eligibility: Confirm Eligibility and the loan amount offered in FD.
• Complete Application: Fill out and submit the required application forms.
• Submit Request: Submit your request and wait for approval by the bank.

Offline Application Process 

Customers who want to visit the branch to apply for a loan against FD may follow these steps:

• Visit the Branch: Visit the closest branch of ESAF Small Finance Bank.
• Carry Documents: Carry ID proof, your FD details/receipt.
• Request Loan: Request the staff whom you wish to take a loan from the FD.
• Confirm FD: Confirm which FD is to be pledged as security.
• Complete Forms: Sign and fill in the required forms.
• Loan Approval: The bank approves the request and determines the limit of the loan/overdraft.

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

ESAF Small Finance Bank loan against fixed deposit is mostly useful to the following types of borrowers:

• Individuals facing urgent expenses: Customers who need money urgently for medical emergencies, tuition fees, or short-term expenses can take a loan against FD without closing their FD.
• Small business owners and self-employed professionals: This facility can help business owners and freelancers manage the gap in working capital or handle cash flow problems more effectively.

Repayment Options for ESAF Bank Loan Against FD

Repayment terms for the ESAF Small Finance Bank loan against FD are flexible, though certain conditions apply. The points below explain how the repayment process generally works for this facility:

• Flexible Repayment Options: Borrowers get the option to make a lump sum repayment or an instalment repayment, depending on the bank's policies.
• Interest on Utilised Amount Only: In an overdraft against an FD, an individual will pay interest only on the utilised amount, and not on the entire limit that has been sanctioned.
• Minimal or No Processing Fees: Banks may charge no or minimal processing fees on a Loan against an FD.
• FD Access Restored After Successful Repayment: When the customer repays the loan on time, the lien on the FD is removed, and the deposition continues as usual.

Key Takeaways

The ESAF Small Finance Bank loan against FD offers you the opportunity to easily get money without closing your fixed deposit. You can borrow up to 90% of the value of the FD, despite having a low credit score, since the deposit is used as a guarantee for the loan. The interest rate is usually 1% to 2% higher than your ESAF Small Finance Bank FD rates, but affordable than the personal loans. Your FD still earns interest during the term of the tenure, but the loan tenure can not exceed the FD maturity. It is an intelligent liquidity solution to an urgent or short-term financial need due to flexible repayment plans and the availability of an overdraft facility.