South Indian Bank Loan Against FD

What is a South Indian Bank Loan Against FD?

South Indian Bank loan against fixed deposit allows you to borrow money without closing your fixed deposit. The FD continues to earn interest while serving as security for the loan against FD. Interest rate is generally 2% higher than the FD rate for deposits up to ₹10 lakh, and 1% higher for deposits above ₹10 lakh.

Key Features of South Indian Bank Loan Against FD

Some of these key features of the Loan against FD South Indian Bank are:

• Pay Interest Only on Used Amount (Overdraft Facility): In overdrafts, interest is charged only on the utilised amount, not the full sanctioned limit. 
• Competitive Interest Rate: The loan against a fixed deposit is offered at an interest rate linked to the South Indian Bank FD rates. Only the borrowed sum and loan tenure incur interest charges.
• Interest Earned on Full FD Amount: When you receive a loan on FD, the full FD amount keeps earning interest, thereby supporting the consistent growth of your savings.
• Wide Eligibility: Fixed deposit holders of South Indian Bank, both single and joint account holders, are entitled to access this loan facility.
• Minimal Documentation: Since your Fixed Deposit backs the loan, the paperwork is streamlined and processed more quickly.

How to Apply for a South Indian Bank Loan Against FD?

South Indian Bank offers the facility to borrow against Fixed Deposits, permitting applications through its internet banking platform or in person at branches. Here’s how you can apply:

1. Online Loan Application

   Using South Indian Bank’s NetBanking, customers can effortlessly apply for a loan against their fixed deposit. Follow these steps:

   • Log in to NetBanking: Sign in using your Customer ID and password.
   • Navigate to the Fixed Deposit Section: Check for Fixed Deposit or FD loan alternatives.
   • Select Your FD: Choose the Fixed Deposit you want to pledge for the loan.
   • Apply for a Loan: Initiate the loan request against your selected FD.
   • Review Details: Kindly verify the provided loan and interest.
   • Submit Application: Complete and submit the loan request online.

2. Offline Loan Application

   To apply in person, approach your closest South Indian Bank branch and complete the steps specified in the procedure.

   • Visit the Branch: Go to the closest South Indian Bank branch.
   • Request Loan Against FD: Inform the bank representative that you want to apply for a loan against your FD.
   • Submit Documents: Kindly submit your identification and fixed deposit receipt.
   • Select the FD: Choose the Fixed Deposit to be pledged with the help of the bank staff.
   • Review Terms: Evaluate all loan terms, including interest and repayment conditions.
   • Complete Paperwork: Fill in the application form and submit the necessary documents.

Who Should Consider a South Indian Bank Loan Against an FD?

The South Indian Bank loan against Fixed Deposit suits many customers. These include:

• Investors with Fixed Deposits as Security: If you have fixed deposits with South Indian Bank, you can use them as collateral to get a loan without closing your Tax-saving FDs.
• Individuals with Short-Term Fund Requirements: This option provides quick funds for medical, education, or travel needs while keeping your FD intact.
• Small Business Owners and Professionals: This loan allows entrepreneurs and self-employed persons to cover short-term business costs or sustain capital without affecting existing investments.
• Customers Seeking Lower Interest Rates: FD interest rates are typically lower than unsecured loans, so this facility offers a cost-efficient borrowing option using deposits.

Repayment Options for South Indian Bank Loan Against FD

Flexible repayment options for diverse financial needs are provided through South Indian Bank’s FD loan. Here are the main options:

• Repay Anytime: Repayment of a loan against FD can be completed without following fixed EMI terms. There is no requirement to pay the entire loan amount in one payment.
• Multiple Payment Methods: You can make repayments via NetBanking, RTGS/NEFT, or by visiting the nearest South Indian Bank branch.
• Partial or Full Repayment: You may, at your discretion, repay partially or completely clear the loan amount.
• Automatic Loan Closure on FD Maturity: When the Fixed Deposit reaches maturity or is terminated, the outstanding loan balance is automatically recovered from its proceeds.
• Repayment Through Other Account: The loan may also be repaid from any of your other accounts with South Indian Bank, offering convenient repayment management flexibility.

Key Takeaways

A South Indian Bank loan against FD offers quick liquidity without closing your deposit. You can borrow up to 90% of your fixed deposit amount while it continues to earn interest. The loan is available at competitive rates, usually 1–2% above the FD rate, making it a cost-effective option compared to personal or other loans. It is a convenient borrowing solution for urgent or planned needs with flexible repayment choices, minimal documentation, and both online and branch application options.