Get India Shriram Finance Limited Application Cum Undertaking For Loan Against Fixed Deposit Receipt 2023-2025

Dear Sir, Please open in the name/s shown below a Fixed Deposit Account in ance with the rules of the bank on the following terms and conditions and issue me/us a Deposit receipt. By debit to my/our savings/current/ account no. ______________________ with you.

An overdraft is a variable amount of borrowing agreed with your bank up to a set limit. A loan is a fixed amount of borrowing over a set term with regular repayments. Overdrafts allow you to borrow money as and when you need it up to a limit agreed between you and the bank.

Interest on Utilized Amount: Unlike a loan against FD, where interest is charged on the entire loan amount, an overdraft facility charges interest only on the amount utilized. This means that the unused portion of the FD continues to earn interest as per the original rate.

Loan against FD (Fixed Deposit) is a type of secured loan where customers can pledge their fixed deposit as security and get a loan in return. The amount of the loan depends on the FD deposit amount. This can go up to 90% – 95% of the deposit amount.

Compared to this, an overdraft against FD is a better option. To begin with, you only have to pay significantly lower interest rates. You will have time till the end of the maturity period of the FD to repay the payment. You can prepay without any additional charges as well.

You can repay the loan amount in equated monthly instalments or EMIs. Depending on the lender, you can get up to 90% of your fixed deposit amount as a loan. The terms and conditions, including the loan's interest rate and repayment tenor, vary from lender to lender.

Loan against FD Disadvantages If you default on your loan against fixed deposit, the bank has the right to foreclose your fixed deposit and recover the money. Hence, you can lose out on the entire fixed deposit investment along with the interest income.