Loan for Low Income Earners against FD: Min. Amount 10,000
- Income – The most important criteria checked worldwide including India. There is a minimum annual income required to get a loan.
- CIBIL score – In order to evaluate credit worthiness of the borrower, banks do a rigorous verification check via CIBIL, India’s credit rating agency. Banks get access to the borrower’s past financial transaction history and based on that they calculate the CIBIL score (out of 900). If the score is above the minimum threshold, then applicant has a good chance of loan approval otherwise not.
- No income criteria
- Fast loan disbursal
- No CIBIL check
- Minimum documentation
- Low interest rate compared to traditionally taken loan and few others
- No prepayment penalty
- Low processing fee. Some banks do not even charge this fee.
- Borrower can use the fund for any purpose
|Financial Institution||Minimum Loan Amount (Rs.)|
|State Bank of India||25,000|
|Kotak Mahindra Bank||25,000|
|Bank of Baroda||1,00,000|
- You can borrow after a certain period of opening FD account. Typically 3 months is the minimum period.
- There is no standard tenure of taking loan. However it should not be more than the FD tenure.
- You cannot borrow more than the FD amount. Typically 80% – 90% of the deposit amount can be granted.
- Interest is charged only the amount drawn and not on the entire amount kept in FD.
- If you fail to repay the dues, bank has authority to recover from the FD.
This article has been written by Chandra Mehta.
Chandra is a seasoned banker with 35+ years of experience in banking and financial services industry. He’s a retired banker and has served as Chief Manager and Assistant Vice President in State Bank of India/or its subsidiaries.
He has authored many articles on this site (allonmoney.com).