Calculate your loan against fixed deposit interest
Year-by-year repayment schedule
| Year | Principal paid | Interest paid | Balance at year end |
|---|
Reducing-balance method. Results are estimates for planning; the lender's Key Fact Statement is final.
A loan against a fixed deposit is usually priced 1% to 2% above the deposit rate, and the deposit keeps earning interest, so the net cost is only that margin.
Loan Against Fixed Deposit at a glance
The figures the calculator starts with come from these typical ranges. Change them to match the offer in front of you.
| Feature | What to expect |
|---|---|
| Typical loan amount | Often up to about 75% to 90% of the deposit value, subject to a minimum and maximum |
| Tenure | Up to the FD's maturity date, with some overdraft limits renewed with the deposit |
| Indicative interest rate | Usually around 1% to 2% above the FD's interest rate |
| Processing fee | Often nil or small, sometimes a flat fee or a low percentage, plus taxes |
| Security / collateral | Lien on your fixed deposit, which continues to earn interest |
| Typical time to disbursal | Often same day, and in some cases within minutes through net banking |
From our Loan Against Fixed Deposit guide. Ranges are indicative; your offer may differ.
Interest by how much you draw
On a limit of ₹3.6 lakh at 8% for 1 year:
| Amount drawn | Interest a month | Interest for 1 year |
|---|---|---|
| 25% (₹90,000) | ₹600 | ₹7,200 |
| 50% (₹1.8 lakh) | ₹1,200 | ₹14,400 |
| 75% (₹2.7 lakh) | ₹1,800 | ₹21,600 |
| 100% (₹3.6 lakh) | ₹2,400 | ₹28,800 |
Drawing the full limit all the time would cost ₹28,800; using 80% costs ₹23,040. A term loan works differently: you repay principal with every EMI, so the balance falls and a term loan of ₹2.88 lakh over 1 year would cost about ₹12,632 in interest. The credit line wins when you need the money only part of the time or can repay it quickly; a term loan is usually cheaper for a fixed amount you need for the whole period.
Loan against FD or break the FD?
Breaking a deposit early usually means a lower rate for the period it ran and a penalty, often 0.5% to 1%, on the whole deposit. A loan keeps the deposit earning 6.5% while you pay 8% only on what you borrow. For a short need, the net margin of 1.5% on ₹2.88 lakh, about ₹4,320 for 1 year, is often less than the penalty and lost interest. For a long need, breaking the deposit may be cheaper.
How the rate changes the cost
Banks price FD loans at a fixed margin over the deposit rate, so the rate moves with your deposit. On ₹2.88 lakh drawn for 1 year:
| Rate a year | Interest a month | Interest for 1 year |
|---|---|---|
| 7.5% | ₹1,800 | ₹21,600 |
| 8% | ₹1,920 | ₹23,040 |
| 8.5% | ₹2,040 | ₹24,480 |
Use it like a line of credit
Compare the net margin with the penalty for breaking the FD early. For a short need, a loan against the FD often costs less than breaking it.
How the interest is calculated
Interest on a credit line is worked out on the daily outstanding balance: interest = amount drawn × yearly rate × days ÷ 365. Most lenders debit it monthly. The calculator uses the average amount drawn over the period, so if your balance moves a lot, use a realistic average. Renewal or annual fees are not included.
Before you apply for a loan against fixed deposit
The calculator tells you what the loan costs. Before you apply, check whether you qualify, what documents lenders ask for and the mistakes borrowers most often make.
Related EMI calculators
Planning tools
Loan Against Fixed Deposit EMI: frequently asked questions
How is interest charged on a loan against fixed deposit?
Only on the amount you draw and only for the days it is outstanding. Here ₹2,88,000 for 1 year at 8% costs about ₹23,040.
Is there an EMI on a loan against fixed deposit?
Usually not. Most are run as an overdraft or limit, where you pay interest monthly and repay the principal when you can, within the limit's validity. Some lenders offer a term loan version with EMIs.
Is a credit line cheaper than a term loan?
Only if you use it flexibly. Holding ₹2,88,000 for 1 year costs about ₹23,040 here, while a term loan of the same amount repaid by EMIs costs about ₹12,632, because its balance falls every month. Draw only when needed and repay early to keep the line cheaper.
Are there other charges?
Processing fees of about 0% to 0.5% of the limit plus GST may apply, and some lenders charge again on renewal. Check the Key Fact Statement.
What rate will I get?
Indicative rates run about 7.5% to 9% a year. Your rate depends on the lender and your profile, so enter your own offer in the calculator.
What happens if I do not repay on time?
Interest keeps running and penal charges may apply. Late payments are reported to credit bureaus and can affect future borrowing.
Rates, fees and limits are indicative ranges for India, reviewed on the date above. KhatuLoans is not a lender and does not decide approval or pricing. Read our editorial policy and how we make money.
Official sources and further reading
These guides are written from Reserve Bank of India rules and official scheme pages. Rules, rates and scheme terms change, so check the current position on these sites and in your lender's Key Fact Statement before you apply.
- SEBI. The securities market regulator, relevant to loans against shares, mutual funds and bonds.
- RBI: Key Facts Statement (KFS) for loans and advances. The Reserve Bank of India notification that tells lenders to give every borrower a plain-language statement of the full cost of a loan.
- RBI Complaint Management System. Where to take a complaint against a bank, NBFC or other regulated lender if the lender does not resolve it.
- RBI (Pre-payment Charges on Loans) Directions, 2025. Bars pre-payment charges on floating-rate loans taken by individuals for non-business purposes, for loans sanctioned or renewed from 1 January 2026.
- Reserve Bank - Integrated Ombudsman Scheme, 2021. The single complaint scheme for customers of banks, NBFCs and other RBI-regulated lenders.
- RBI: Free Annual Credit Report to Individuals. Credit bureaus must give you one free full credit report with score every calendar year.
- RBI Financial Education. Consumer guidance from the Reserve Bank of India on borrowing, fraud and your rights as a customer.
Edited by Hemant Kumar. Rates on this site are indicative ranges, not offers.