A loan against fixed deposit is a secured loan where your FD acts as collateral. You do not break the deposit — you pledge it. The lender holds it as security and gives you a loan against its value. The FD continues to earn interest throughout. When your FD matures, the loan amount and interest are adjusted from the proceeds.

With Bajaj Finance, you can borrow up to 75% of the value of a cumulative FD and up to 60% of a non-cumulative one. So if you have a cumulative FD worth Rs. 5 lakh, you can get up to Rs. 3.75 lakh as a loan — and the remaining Rs. 5 lakh keeps earning its full interest.

The Interest Rate Advantage

The interest on a loan against FD is typically 2% per annum above your FD interest rate. If your FD earns 7%, your loan interest is 9%. Compare that to a personal loan at 12–18%, and the difference is significant.

And here is the kicker. While you pay 9% on the loan, you continue to earn 7% on your FD. Your net borrowing cost is effectively just 2% per annum — one of the cheapest forms of credit available to individuals in India. No processing fees, no foreclosure charges. Transparent and simple.