Loans against FDs are best bet

Jul 22, 2012 - Harsh Roongta

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I have availed home and personal loans from a bank account of mine. Do I need to disclose details of these while seeking a new loan against my salary account?
Samik Malla
Hyderabad

You can get another loan only if your income can justify all the loans you have as well as new ones.
Your existing loans will certainly have an impact on your new loan eligibility. Yes, it is mandatory to disclose all details of existing loans that may be running on your account. Even if you do not, these details will reflect in your CIBIL (Credit Information Bureau India Limited) report, which the new lender will access anyway.

Any information, in the application if found to be incorrect may also create suspicion and will jeopardise your chance of getting the loan from the lender. Separately please ensure that the EMIs payable on all loans do not exceed 50 per cent of your monthly income else you may be fully into a debt trap. I would like to avail of an education loan of Rs 2 lakh. How do I go about it?
Nikhil Kurian Jacob
Kochi

A student can get an education loan of up to Rs 4 lakh without any collateral. A number of banks have application forms online. You will need to submit your course details, proof of your confirmed admission to the college along with photographs, identity proof and past education records. The bank may also require your parents to be co-borrowers/guarantors for the loan.

How much loan can I get against my fixed depo-sit? Will I get the entire amount, and at what rates?
Lavish Lalvani
Mumbai
The eligibility of the loan amount in case of loan against fixed deposits will be maximum upto 90 per cent of the amount in your fixed deposit. Interest charged on such loans is generally 1-2 per cent higher than the rate you receive on your fixed deposits.

Compared to all loans, which is the cheapest and the simplest loan in case of emergency?
Pragya Sen Gupta
Kolkata
Taking a loan against one’s fixed deposit makes more sense not just beca-use of its comparatively lower interest rate, but also because of the lesser procedural hassles compared to the others.
Also, most importantly, in case of any unforeseen eventuality or not being able to repay the loan, the borrower or his family will not have to face the brunt of repayment of the loan since the same will be recovered by the bank from the borrower’s fixed deposit account. This will also help you in not becoming a defaulter.

On the other hand, you can also avail of loans against national savings certificate, life insurance policies having good paid-up value, gold, mutual fund units and shares of reputed firms. However, the rate of interest in case of the second category of loans will be higher than that against fixed deposits.

Harsh Roongta is the chief executive of Apnapaisa.com. You can send in your queries to movingmoney@deccanmail.com

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