Is a personal loan in Kochi better than loan against FD?

personal loan in Kochi

When a need for money arises, the first thing you think of is about your savings and whether you can draw upon them. However, in most cases, your savings are locked up in some way so that they earn maximum interest. For example, you may have your savings locked up in a fixed deposit. In this case, you may think that taking a loan against this fixed deposit is a good solution to your cash problems. However, there are times when a simple personal loan in Kochi may serve your purpose in a much better way and be the more practical solution to handle the situation. Here’s how you can make the decision between a personal loan and a loan against your fixed deposit.

The impact of a loan against FD

An FD is a safety net you have created for yourself in case of an emergency. Taking a loan against it impacts your safety net and prevents you from using it when you might need it most, thus defeating the very purpose for which you have saved up money.

Usually, a loan against FD may be only available for a short-term period. That is a further constraint for you because you are forced to repay it within the given short tenure. When you are already in financial distress and that has pushed you to taking a loan against your FD, there is no way to guarantee that you will be able to fulfil the repayment terms of the loan. Failure to do so can result in huge penalties that further burden you financially.

A personal loan in Kochi too is a financial liability that you must repay but you have the option to choose a term of loan and other conditions that make it easy for you to repay. For example, if you choose a longer term, the interest on personal loan may be lower and then your EMIs become more affordable for you. If you are unsure about your finances in the near term, then this flexibility can be very valuable.

What happens if you have no FDs?

FD based loans are restricted to those who have already invested in fixed deposits. What happens if you do not have any, or if you just have a very small sum in FDs and your financial need is far greater? In such cases, a personal loan is the better idea since it is not dependent on any other asset that you have.

More importantly, you can choose any lender you wish to avail of the loan. This means you can do your comparison shopping thoroughly and pick a lender who offers great terms for your loan. You are not restricted to the bank that you have FDs in, which may not be offering very attractive interest rates at all. You have the freedom and flexibility to go with whoever is offering the lowest interest on a personal loan so that the overall cost is kept in control.

Get a bigger loan to meet your needs

When you choose to take a personal loan over a loan against FD, the loan amount is left to your choice and you can cover your entire need without having to use different means to fulfill the entire requirement. Having one single loan is better in many ways because this is just one liability for you to track and repay. Easy management makes it easy to maintain repayments on time and avoid penalties.

With so many lenders in the market today, it is not a very difficult task to find one offering a low interest on personal loan that also matches all your needs perfectly. All reputed lenders have an online presence where they list out their loan products in detail so you can simply compare products of various lenders side by side with ease to find the ideal one for your needs.

If you match the eligibility criteria, all you have to do when you find the loan that fits is to fill out the application online, attach the relevant documents and then submit it without even having to go to the lender in person. With the process being so simple and straightforward and with so many advantages over a loan against FD, it is no surprise that a personal loan in Kochi is the popular choice for individuals needing cash to meet an unavoidable need.

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