Need for cash can come at anytime during emergencies, but the demand can also arise when you are planning a vacation or a wedding. This can often leave little time to meet the eligibility criteria for any sort of personal or short term loans. However, there is a solution. If you have a fixed deposit investment, then the trouble for availing loans can be minimised. In fact, you can pledge 90% of your fixed deposit value to apply for loans. This is exactly what the largest lender State Bank of India (SBI) is offering to customers. At SBI Online, one can avail both demand loan and overdraft facility as per need against fixed deposits. Among the many benefits available to loan-takers for this type of loans are - zero processing charges, low-interest rates and no prepayment penalties. Also, the interest rate is charged on daily reducing balance!

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Here's what you need to know about loan against FDs at SBI. 

Eligibility:

Individual Customer holding TDR/STDR/e-TDR/e-STDR with SBI in Single name only (No Joint Account Holders) can avail the facility online.

Joint Account Holders can avail this facility at the Branches. At Branch level, the loan is also sanctioned against the security of RD/e-RD/NRE/NRO/RFC and FCNR(B) Deposits.

How much loan can be sanctioned?

Currently, the online facility is restricted to Overdraft only. For availing Demand Loan customers need to visit the Branch. The customer will be able to avail 90% of his e-STDR / STDR value and 75% of his e-TDR / TDR as Overdraft facility on the Internet banking platform.

At Branch level, the customer can avail 90% of his underlying security value as Demand Loan/ Overdraft facility.

The minimum loan amount for availing online overdraft facility is Rs 25,000. Maximum Overdraft limit which can be availed online against your Fixed Deposits Rs 5 Crore. There is no specific minimum loan limit for advances at the branch level. 

Repayment facility:

Maximum repayment period overdraft against e-STDR / STDR is 5 years or residual period which is less, subject to a minimum of 6 months. While, maximum repayment period overdraft against e-TDR / TDR is 3 years or residual period which is less, subject to a minimum of 6 months.

For loans sanctioned at Branch level, suitable repayment schedule will be fixed depending upon the repayment capacity of the borrower.

How to avail?

A customer must visit www.onlinesbi.com and log in using his User Id and Password. Overdraft against Fixed Deposit is available under e-Fixed Deposit tab. Alternatively, the customer can also approach the Branch for availing the facility.

The interest rate levied in this loan is 1% above the relative time deposit rate.