Taking a loan against your Post Office Recurring Deposit (RD) can be a smart, low-cost borrowing option that allows you to access funds while continuing to earn interest on your investment. With low interest rates and flexible repayment options, this facility is an excellent choice for anyone looking to finance short-term needs without breaking long-term savings goals.
In this article, we will explain how to take a cheap loan from Post Office RD, its benefits, eligibility criteria, and the step-by-step process. Whether you are an investor looking to maximize your savings or someone needing urgent financial assistance, this guide has you covered.
Post Office RD
| Feature | Details |
|---|---|
| Loan Type | Secured Loan against Post Office RD |
| Interest Rate | RD rate + 2% (e.g., 8.7% if RD rate is 6.7%) |
| Minimum RD Duration | 12 months (1 year) |
| Loan Amount | Up to 50% of the RD balance |
| Repayment Tenure | Till RD Maturity |
| Eligibility | Active RD account with 12+ months of deposits |
| Official Source | India Post Website |
Taking a cheap loan against your Post Office RD is a smart financial strategy to access emergency funds while keeping your savings intact. With a low-interest rate, easy repayment, and government-backed security, this loan facility is an excellent alternative to expensive personal loans.
If you have an RD account with 12+ months of deposits, consider leveraging this loan option instead of breaking your RD or taking a high-cost loan. Visit your nearest Post Office branch to apply today!
What is a Post Office Recurring Deposit (RD)?
A Post Office Recurring Deposit (RD) is a popular savings scheme where you invest a fixed amount every month for five years. This helps build a substantial savings corpus while earning compounded quarterly interest. The current RD interest rate is 6.70% per annum (as of 2024), making it an attractive option for conservative investors.
Benefits of Post Office RD
- Guaranteed Returns: Fixed returns with government backing.
- Low Investment Requirement: Start with just ₹100 per month.
- Quarterly Compounding: Your savings grow faster over time.
- Loan Facility: Borrow up to 50% of your RD balance without breaking your savings.
see also: Post Office Scheme You will get ₹20,500 every month
How to Take a Loan Against Your Post Office RD
1. Check Your Eligibility
Before applying for a loan, ensure you meet these requirements:
- Your RD account must be at least 12 months old.
- You must have paid all monthly installments on time.
- The total loan amount can be up to 50% of your RD balance.
2. Understand the Loan Terms
- Interest Rate: The loan will be charged 2% higher than the RD rate.
- Example: If RD rate = 6.7%, loan rate = 8.7%.
- Repayment: You can repay the loan in one lump sum or through monthly payments.
- Impact on Maturity Amount: If not repaid, the outstanding amount + interest will be deducted from final RD maturity proceeds.
3. Apply for the Loan
Follow these steps to apply for the loan:
- Visit your nearest Post Office branch.
- Submit a written application requesting the loan against RD.
- Provide RD passbook and identity proof (Aadhaar, PAN, etc.).
- The loan amount will be credited to your savings account.
4. Loan Repayment Process
- Repay the loan before the RD maturity date.
- You can repay in monthly installments or a single payment.
- If you don’t repay, the loan + interest will be deducted from the final RD payout.
Advantages of Taking a Loan Against Post Office RD
Lower Interest Rates
Loans against RD have much lower interest rates than personal loans, which can have rates of 10-20%.
No Credit Score Requirement
Since the RD balance is collateral, there is no credit score check required.
Senior Citizen Savings Scheme: वरिष्ठ नागरिकों के फायदे की स्कीम, पोस्ट ऑफिस से करें आवेदन
Continued Interest Earnings
Your RD continues to earn compounded interest, even when you take out a loan against it.
Easy Process & Quick Disbursal
The application process is simple, and funds are available within a few working days.
Things to Consider Before Taking the Loan
- If you don’t repay, your maturity amount will be lower.
- This loan is best suited for short-term needs, not long-term financing.
- Compare with other low-interest options like gold loans or secured loans.
see also: It takes this much time for the money to double in FD
Post Office RD FAQs
1. Can I take multiple loans against my Post Office RD?
No, only one loan is allowed at a time against an RD account.
2. What happens if I don’t repay the loan?
The outstanding loan + interest will be deducted from your RD maturity amount.
3. How long does it take to get the loan?
The loan is usually processed within a few working days, depending on the Post Office branch.
4. Can I repay the loan early?
Yes, you can repay anytime before the RD maturity.
5. What is the maximum loan amount I can get?
You can borrow up to 50% of your RD balance.
