Loan Against Fixed Deposit (FD) Calculator
Need cash urgently? Breaking your FD results in heavy bank penalties and lost interest. Taking a loan against your FD is instant, requires no CIBIL check, and is surprisingly cheap.
Last updated: May 2026
Estimated EMI
Total Interest Cost: ₹18,655
Loan Interest Rate
8.5%
Loan Approval Metrics
- Max Eligible Amount (90% LTV):₹450,000
- Approved Loan Amount:₹400,000
- CIBIL Check Required: No
Instead of breaking your FD and losing interest (plus a 1% premature withdrawal penalty), taking a loan against it is often much cheaper because you only pay a net 1-2% spread.
Reviewed by Sneha Iyer, CFP
•Certified Financial PlannerSpecializing in wealth management and retirement planning. Sneha validates the investment projection models and compound interest algorithms used across our financial tools. All mathematical models and regulatory data points have been verified for the current 2026 fiscal period.
Why Take a Loan Against an FD?
When a financial emergency hits, the first instinct is to break your Fixed Deposit. However, banks charge a 1% premature withdrawal penalty on the lower interest rate applicable for the tenure the FD actually ran for.
Instead, banks offer a Demand Loan or Overdraft facility against your FD. You can borrow up to 90% of your FD value. The best part? The bank will only charge you 1% to 2% higher than your FD earning rate. Your original FD continues to earn interest undisturbed.
How to use this calculator
- 1FD Details — Enter your current Fixed Deposit amount and the interest rate the bank is paying you.
- 2Loan Amount — Enter how much cash you need. The calculator caps this at 90% of your FD amount (the standard RBI/Bank limit).
- 3Tenure — How many months will it take you to repay this? The loan tenure cannot exceed the remaining tenure of the FD.
Formula & example
The 1.5% Spread Rule
Example: You have a ₹5 Lakh FD earning 7%. You need ₹2 Lakhs for 1 year.
- Max Eligible Loan: ₹4.5 Lakhs (90%)
- Loan Interest Rate: 8.5% (FD rate + 1.5%)
- EMI for 1 Year: ~₹17,445
- Total Interest Paid: ~₹9,340
- Your FD will still earn ₹35,000+ in the background!
Benefits
No CIBIL Required
Because the loan is 100% secured by cash, banks do not pull your CIBIL score. Approvals are instant (often 1 click on NetBanking).
Zero Processing Fees
Unlike Personal loans that charge 1-2% processing fees, FD loans usually have zero fees.
Overdraft Flexibility
You only pay interest on the amount you actually use, and you can repay it whenever you want without prepayment penalties.
Use cases
Medical Emergencies
Getting instant cash without liquidating long-term safe assets.
Short-Term Cash Flow
Business owners using an FD Overdraft to pay suppliers while waiting for invoices to clear.
Frequently asked questions
Is it better to break the FD or take a loan?+
If you need the money for a very short period (e.g., 2 to 6 months), taking the loan is mathematically much cheaper. If you need the money permanently and won't be able to repay the loan within the FD tenure, you should break the FD.
Can I take a loan against a tax-saving FD?+
No. Tax-saver FDs have a mandatory 5-year lock-in period under Section 80C. Banks do not allow premature withdrawal or loans against them.
What happens if I don't repay the loan?+
When your FD matures, the bank will automatically deduct the outstanding loan principal and interest, and deposit the remaining balance into your savings account.