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Q.

Can I Get Home Loan on Fixed Deposit?

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Yes, you can get a home loan on fixed deposit, but it is typically referred to as an overdraft or loan against FD, not a home loan. While this loan type is secured by your FD, the funds you receive can be used for various purposes, including property purchase, though it doesn’t classify as a home loan.

How to Get Home Loan Against Fixed Deposit?

Here’s how it works:

  • When you take a loan against your FD, the FD acts as collateral. Banks and financial institutions generally offer loans up to 90% of the FD’s value, depending on the bank's policy.

  • The interest rates on these loans are generally 1-2% higher than the interest rate on your FD, making it a relatively low-cost borrowing option compared to unsecured loans.

  • Unlike some home loans, loans against FDs often come with flexible repayment options and no prepayment penalties. You can repay the loan as per your convenience without affecting your FD’s tenure.

The process for obtaining a loan against an FD is relatively simple and fast, as there are minimal eligibility criteria and no extensive paperwork, given that your FD already serves as collateral. I hope this answers your questions, can I get home loan on fixed deposit.

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