Loan against FD

POSTED BY Raj ON February 16, 2011 4:04 pm ONE COMMENT

I’m planning to take a loan of 2.5L against my FD. FD currently draws 9% interest and the Bank has offered loan on 10% for 1 year.

Is it a good idea? How much I’ll be paying as interest on Loan and how much I would be earning as Interest on FD component.

One reply on this article “Loan against FD”

  1. bharat shah says:
    February 18, 2011 at 1:32 pm

    i think, you keep earning 9% p.a. on your fd of 2.5 lacs , if you hold it for the fixed period, whereas you have to pay 10% p.a. on your loan,, i.e. 1% more than what you earn. alternately you can encash part of your fd as per your requirement, and balance you can keep as continuing fd, and you have to forego some %age of interest for prematured amount as per set rules of the bank. you can calculate and decide what is better, and also allowed by the bank.

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