Learn major facts related to FD

An FD is an ideal means of investment to enable one’s financial security. However, people often fail to understand its importance and its correct use, especially at the time of financial distress. In times of the credit crunch, many people will tend to break their FDs to generate funds, though this is not a wise decision to manage one’s financial crisis. 


Many people are not aware of the fact that an FD can be used to take a loan. This is a convenient and feasible option that provides a variety of benefits. These are listed below:



Amount of loan: The loan sanctioned against an FD is granted on 70%-95% of the Fixed deposit’s value. Thus, the loan can be quickly paid off. 


Interest rate and processing fees: The interest rate and processing fees charged against a loan on FD are comparatively less because the borrower is already a customer of the Bank. 


Tenure: Unlike other loans, there is no fixed tenure imposed upon a loan against FD. The loan can prevail as much is the period of the deposit. 


Repayment and Foreclosure charges: There are no foreclosure charges imposed upon loans against FD. Also, the loan can be repaid in a lump sum or installments.


Thus, a loan against FD is a feasible and wise option in comparison to any other loan.



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