According to a survey, about 67% of Indians are reliant on Personal Loan for their emergency funding needs. However, many struggle to research and choose the best loan options to cater for their specific needs. If you are confused about whether to choose a Personal Loan and a loan against FD, the blog covers the solution. Read on to get a thorough comparison between a Personal Loan vs. Loan against FD.
A Personal Loan is a type of credit where you do not need to provide collateral or security. The application process is simple with minimal documentation requirements. Additionally, there is no restriction on the use of loan amount.
A Loan against FD is a type of short-term debt provided by financial institutions as an overdraft facility for customers. The loan limits are based on the amount deposited into your account. However, the interest charged are higher than that of FD rates.
Following are some of the key differences between a Personal Loan and a Loan against FD.
Factors |
Personal Loan |
Loan against FD |
Tenure of the Loan |
Up to sixty months |
Till the maturity of your Fixed Deposit |
Required Documentation |
Address proof, identity proof and income proof documents |
No extra documents needed |
Amount of your Loan |
Up to Rs. 30 Lakh* |
Up to 90% of your Fixed Deposit amount |
Processing Fees |
Up to 2% of your loan amount |
Depends upon the financial institution |
Interest Rates |
Starts from 9.99%* p.a. |
2% to 5% higher than the return rates on your Fixed Deposit |
Upon getting a loan against a Fixed Deposit your years of savings will evaporate. This can make it difficult to fulfil the purpose for which you have started the FD in the first place. So, it would be prudent to go for a Personal Loan and keep your FD safe.
Since there is complete flexibility to customize your Personal Loan, you can adjust the loan amount and repayment tenure easily. Also, you will get various additional benefits upon availing this credit type.
*Note – Please note that the mentioned amount and interest may differ from lender to lender.
There are numerous advantages that borrowers can get upon availing a Personal Loan. Some of the primary Personal Loan benefits include:
*Note – Please note that the mentioned amount and interest may differ from lender to lender.
The eligibility criteria for availing of any Personal Loan are as follows:
Also Read - How Does Age Influence Your Eligibility to Take a Personal Loan?
The documents required for Personal Loans are as follows:
However, while applying for a Personal Loan, you may be asked for additional information to verify your identity and credibility for the loan apart from the above-stated papers.
Getting a Personal Loan is easy and can be completed within 5 minutes. You can follow the steps below to apply for a Personal Loan:
Also Read - What is Personal Loan? Things You Should Know
Both Personal Loans and loan against FDs offer various benefits to a borrower. However, considering the comparison between a Personal Loan vs. loan against FD, it is quite clear that a Personal Loan would help you manage your expenses conveniently. For additional advantages, select reputable financial institutions such as Poonawalla Fincorp for better loan terms.
Apply for a Poonawalla Fincorp’s Personal Loan and fulfil your immediate fund needs!
We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply