Unforeseen medical problems, a trip to a foreign country made in haste, home repair and renovation work etc. are some common financial tasks that are likely to occur in every individual's life. There is no way you can avoid it, and there's no way you can plan complete financial cover for such activities. In the end, when the shortfall occurs, you'll be left with only one option - to take a loan to manage the deficit.
Now, here’s the tricky part, there’s a particular credit scheme for almost every big and small financial task. For instance, you have a business loan for business related needs, home loan for purchasing a home, car loan for buying a vehicle etc. However, there are some financial tasks such as the ones mentioned above, for which the financial institutions don’t have a specific credit scheme.
What can be done then to manage the deficit in the above-mentioned conditions?
The answer is pretty easy, you can take a loan against a fixed deposit. Loan against fixed deposit is a type of mortgage loan wherein the money can be borrowed by mortgaging a fixed deposit as the collateral. However, the things an applicant must remember are;
How does loan against FD help?
As an applicant, you can borrow the required money as a loan against your fixed deposit certificate without liquidating it, preserving the returns alongside managing your cash needs.
To sum up, you keep on earning interest from your FD investment while it is mortgaged against the loan availed by you.
Aman Khanna is an experienced financial advisor who is well known for his ability to foretell the market trends as well as for his financial astuteness. He has an MBA in finance from Toronto University as well as years of experience delivering seminars on sound financial practices and debt management.