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Explore how you can take education loan against FD. In this you will find out everything you need to know about education loan against FD like how it works, required documents and much more.
Did you know that the number of Indian students studying abroad will reach a whopping 1.5 - 2 million by the year 2025? As of 2023, the current estimate stands at approximately 1 million. Studying abroad has become the talk of the town, and many people are opting for it.
The main challenge that arises is arranging funds, and the solution often lies in education loans. Collateral-based education loans are considered the best, and here's an interesting twist – did you know that you can use your Fixed Deposit (FD) as collateral and take an education loan against it? Yes, you read it right. In this blog, you will learn various aspects related to using your Fixed Deposit as collateral for an education loan.
An education loan against FD works similarly to any other secured education loan, involving the borrower obtaining a lump sum and repaying it through equal monthly installments (EMI). This secured loan permits borrowers to access funds by using their fixed deposit as security. The Loan-to-Value (LTV) factor becomes crucial in this context, enabling the calculation of the percentage of funds available to the invested amount, namely the fixed deposit. Typically, the LTV for fixed deposits ranges from 90% to 95% of the total deposit value. In response to the question, "How much loan can I get against my FD?" - You can typically secure up to 90% of the total loan amount based on the value of your Fixed Deposit (FD).
Check Your Education Loan Eligibility
ICICI Bank has introduced a new feature allowing customers to instantly receive a sanction letter for education loans of up to 1 Cr INR. This innovative service empowers numerous pre-approved customers to seamlessly secure education loans through a completely digital process, utilizing their fixed deposits with the bank i.e. you will be getting a student loan against FD. The Insta Education Loan facility provides borrowers the flexibility to fund higher education, whether for themselves, their children, siblings, or grandchildren, across accredited colleges and universities globally. While this stands as a noteworthy example of an education loan against an FD, various other lending options are also available for those seeking financial support for overseas education.
The specific documents required for an education loan against FD may vary slightly among different financial institutions. However, common documents typically include:
It's advisable to check with the specific bank or financial institution for their exact documentation requirements, as they may have variations in their criteria.
Get the Funds you need to Study Abroad
Education loan against FD comes with some great perks. Let's explore these advantages that make this option a smart and simple choice for students.
While taking an education loan against FD has its advantages, it's equally important to be aware of potential drawbacks. Let's explore some disadvantages to consider before opting for this financial arrangement.
Now that you recognize the wisdom in opting for an education loan against FD, it's time to explore lenders that not only offer secured education loans but also accept FD as collateral. Various lenders, including public sector banks, private sector banks, and NBFCs, are available. Sorting through these options can be challenging, but this is where GyanDhan comes in to assist you. We have partnered with lenders of all types and can help you pinpoint the best loan by thoroughly analyzing your requirements. All the services provided by GyanDhan are absolutely free. Simply check your eligibility with GyanDhan and enjoy a seamless process for your overseas education loan.
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Typically, most banks offering education loans against FD prefer the FD to be with the same bank where you are applying for the loan.
Yes, the loan amount against an FD is often capped at a specific percentage of the total FD value, which may vary among different financial institutions.
Yes, it is possible to use a recent Fixed Deposit (FD) as collateral for an education loan. Many banks and financial institutions accept recent FDs as security when providing loans. In this case, how much amount is locked in FD determines the loan terms. You can inquire with your bank or lender about their specific requirements and processes for using an FD as collateral for an education loan.
Yes, opting for an education loan against FD often provides the flexibility of prepayment without any additional penalties.
Beyond lower interest rates, using an FD as collateral can offer benefits like earning interest on the FD during the loan tenure and minimal or no processing fees in many cases.
Check Your Education Loan Eligibility
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