Loan Against National Savings
What Is a Loan Against National Savings?
So you’ve got some money saved up in your National Savings account. Good for you! But what do you do when you need a little extra cash? You could take out a loan against your National Savings.
That’s right—you can use your savings as collateral for a loan. This is a great option if you don’t have any other assets to borrow against or if you need the money quickly.
The best part is that the interest rates on these loans are usually pretty low, so you can get the money you need without breaking the bank. Talk to your bank about getting a loan against your National Savings and see how much money you can borrow.
How a Loan Against National Savings Works
Here is how you can use your National Savings certificates as collateral to get a loan from a financial institution.
The first step is approaching a financial institution and getting pre-approval for a loan. Once you have the pre-approval, you can go to the post office and deposit your National Savings certificates into a special account for this purpose.
The post office will keep track of the certificates and provide you with a certificate of deposit, an agreement between you and the post office that states the amount of your loan and the interest rate.
You can use this certificate as collateral when you apply for the loan. When it’s time to pay back the loan, you can either pay it off in full or roll it over into another certificate of deposit. And if you choose to roll it over, the interest rate will be renegotiated.
Eligibility for a Loan Against National Savings
You might be eligible for a loan against your National Savings account, depending on the institution you go through.
Generally, you’ll need to be 18 or older and a citizen or resident of the country you’re borrowing from.
You’ll also need to have been contributing to National Savings for a certain amount of time—usually 6 to 12 months.
But requirements can vary, so it’s always best to check with the institution before you apply.
And don’t forget: even if you’re not eligible for a loan against your National Savings account, you can still use it to save money.
The Benefits of a Loan Against National Savings
Here are some benefits of a loan against your National Savings Certificates (NSC): The process is simple and straightforward
—all you need is a photocopy of your NSC and some identification, then you can get a loan of up to 90% of the value of your NSC.
The interest rates are very competitive, and you can pay it back over a period that suits you using the loan for any purpose, whether for a new car or a holiday overseas.
Plus, you’re not limited to just one loan—you can borrow against your NSCs several times if needed.
How to Apply for a Loan Against National Savings
You can apply for a loan against your National Savings certificate in the same way as you would apply for a personal loan.
So how do you apply for a loan against your National Savings certificate? The first step is to download the application form from the website of the bank or financial institution you’re borrowing from.
Once you’ve filled out the form, attach copies of your ID and residence proof and copies of your National Savings certificate and bank statement.
You can also attach a recent passport-sized photograph if you want. Then submit the form to your nearest branch.