Loan Against FD – Control Your Cash Fast (2026)

Imagine having a financial cushion you can tap into without disturbing your investments. If you have a fixed deposit (FD) in Australia, you might be pondering, "Can I get a loan against my FD?" The answer is yes, and it can be a smart financial move. Let's explore how you can leverage your fixed deposit to secure a loan, and what you should consider in today's market.

Understanding Loans Against Fixed Deposits

A loan against a fixed deposit is a secured loan where your FD acts as collateral. This type of loan allows you to access funds without breaking your FD prematurely, ensuring you still earn interest on your investment. It's a beneficial option for those needing immediate cash flow while wanting to preserve their savings strategy.

In Australia, many financial institutions offer this facility, allowing you to borrow a percentage of your FD's value, typically ranging from 70% to 90%. It's a popular choice because the interest rates are generally lower compared to unsecured personal loans or credit card advances.

Key Information: Rates, Requirements, and Options

When you're considering a loan against your FD, it’s crucial to understand the current market dynamics, interest rates, and the specific requirements set by lenders.

As of 2026, interest rates for loans against FDs in Australia range from 6.49% to 8.5%, depending on the lender and the customer's creditworthiness. This is significantly lower than typical personal loan rates, which can vary from 10% to 15%.

It's important to note that different lenders have varying criteria, but common eligibility requirements include:

• The fixed deposit must be held with the same institution offering the loan.
• Minimum FD tenure requirements, typically at least 6 months.
• Loan tenure is usually aligned with the FD maturity.

Steps to Secure a Loan Against Your Fixed Deposit

Securing a loan against your FD can be a straightforward process if you follow these steps:

1. Evaluate Your Needs: Determine how much you need to borrow and ensure it aligns with the percentage permitted by your lender.
2. Check Eligibility: Review your FD terms and ensure it meets the lender's requirements for age and tenure.
3. Contact Your Bank: Approach the bank where your FD is held. As a client of Esteb and Co, you can leverage our panel of 83+ lenders to find the best deal.
4. Submit Your Application: Fill out the necessary application forms. You'll need to provide identification and possibly documentation proving the source of funds for your FD.
5. Approval and Disbursement: Upon approval, the loan amount will be credited to your account, usually within a few business days.

Tips and Considerations

Before proceeding with a loan against your FD, consider the following expert tips:

• Maintain Your FD: Ensure that your FD remains intact and continues to earn interest even while you use it as collateral.
• Understand the Risks: If you default on the loan, the bank has the right to liquidate your FD to recover the owed amount.
• Compare Offers: Use Esteb and Co's access to numerous lenders to compare interest rates and terms, ensuring you get the best deal.
• Prepayment Penalties: Check if there are any penalties for early loan repayment, especially if you anticipate being able to close the loan ahead of schedule.
• Consider Tax Implications: Interest paid on the loan is not tax-deductible, unlike some other loan types.

Frequently Asked Questions

1. Can I get a loan against a joint fixed deposit?
Yes, but all account holders must agree to the loan terms and co-sign the application.

2. What happens if I default on the loan?
The bank can liquidate your FD to recover the outstanding loan amount.

3. Can I use a fixed deposit from another bank as collateral?
Typically, the FD must be with the same bank offering the loan. However, some lenders may have different policies, so it's worth checking.

4. Is there a processing fee for loans against FDs?
Most banks charge a small processing fee, which can range from $100 to $500, depending on the loan amount.

5. How quickly can I get the loan amount?
Once approved, the loan amount is usually disbursed within 2-5 business days.

6. Does taking a loan against my FD affect my credit score?
As long as you make timely repayments, your credit score should not be negatively impacted. In fact, successfully managing the loan can improve your creditworthiness.

Leveraging a fixed deposit for a loan can be a wise financial decision, offering lower interest rates and preserving your investment strategy. With the right guidance and careful planning, you can unlock the potential of your FD without compromising your financial goals.