Loan on Recurring Deposit(RD)

Account holder to borrow against the deposit amount. The bank treats the RD as collateral for the loan.

Features:
The loan amount is usually 80–95% of the RD balance.
The interest rate is usually lower than a personal loan.
The loan can be repaid in a lump sum or in equal installments.
If the borrower defaults on the loan, the bank can deduct the loan amount and interest from the RD account.

Eligibility:
The RD account must be open for a minimum period of time.
The RD account must have a minimum deposit amount.
The RD account cannot be linked to other loans.

Application:
The application process may require documents like the RD passbook, KYC, and a duly filled application form

Repayment:
The loan must be repaid before the RD matures.
If the loan is not repaid in full, the amount owed will be recovered from the borrower, their nominee, or legal successor.