What is good? A loan against FD or a home loan.

Let us read the following comparison. 

Criteria 

Home Loan 

Loan Against FD

Loan amount 

The percentage varies according to the loan amount. 

 

90% of the loan amount value if the total loan is up to 30 Lakhs

 

80% if the loan is between Rs. 30 Lakhs and 75 Lakhs 

 

75% if the loan is above Rs. 75 Lakhs 

Up to 90% of your FD amount 

Loan Tenure 

Maximum up to 30 years

Up to the maturity of FD 

Documents required

ID proofs, address proofs, income proofs. Varies for NRIs and resident Indians

None 

Interest rate

6.95% p.a. 7.75% p.a.

2 to 5% higher than return on FD 

Processing and foreclosure fee 

The processing fee is usually around 0.5% of the loan amount (plus GST).  

None 

 

Loan on FD or home loan? Which is better?

Whether you want to opt for a home loan or a loan against Fixed Deposit depends on your situation. The amount of loan you can get with a fixed deposit depends on the amount of money available in your FD. Whereas with a home loan, you can get huge loan amounts. Also, home loans can be repaid over a very long period of time even up to 30 years. Whereas a loan against FD can be repaid only up to the maturity of the FD, which is usually up to a maximum of 10 years.