Many people are unable to avail a loan due to poor CIBIL scores or low income. In an FD overdraft case, they don’t need to meet any of these requirements. All the person needs is to have an FD at the bank to qualify for the loan.
No documentation, fast disbursal
No paperwork is involved in availing an overdraft facility. The FD account holder won’t be needed to give any more documents as the bank already has all of your KYC information. The borrower can receive the funds in their account within 24 hours.
Another benefit of this facility is that the borrower doesn’t have to worry about monthly EMI payments. They can deposit the outstanding balance as per their convenience.
Lower interest rates
FD account holders get a loan at reduced interest rates. Because it is a secured loan, your FDs will serve as security or collateral against the loan amount you will receive.
Higher loan amount
Seeking a loan on the FD can earn a loan amount from 80 per cent to 90 per cent of the overall FD value. The greater the amount of the FD, the greater the amount of the loan.
