Life doesn’t wait for your credit score to improve.

One month you’re fine, and the next you’re staring at an unexpected expense, a hospital bill, a supplier payment that can’t be delayed, or just an opportunity that won’t sit around while you figure out your finances. You need money. Your CIBIL score is sitting somewhere it probably shouldn’t be. And every bank’s website seems to be telling you the same thing: 750 or higher, no exceptions.

But here’s what those websites don’t lead with: if you have a fixed deposit or an investment portfolio, there’s a very good chance you can still borrow, and the credit score conversation becomes almost irrelevant.

Loan Against Fixed Deposit and Loan Against Securities both exist precisely for situations like this. They’re secured loans, which means your asset does the convincing, not your credit history.

So, Can You Actually Borrow with a Low CIBIL Score?

Yes. Often, quite easily.

The whole point of collateral is that it changes the lender’s risk calculation from the ground up. When a bank gives you a personal loan, it’s trusting your track record, your repayment history, your income stability, and the number sitting in your credit report. When you pledge an FD or a securities portfolio, the bank isn’t trusting your history anymore. It’s holding something real. Something it can recover from if things go wrong. That’s a completely different conversation, and it goes much more in your favour when your CIBIL score isn’t great.

People with scores in the 500s, people with no credit history at all, people who’ve had a loan default years ago, many of them have still accessed FD-backed loans without issue, because the lien on the deposit is all the security the bank needs.

What Score Do Lenders Actually Expect in 2026?

Loan Against FD: Most banks don’t publish a minimum because there isn’t one in the traditional sense. The deposit is sitting right there in their system, marked with a lien the moment the loan is sanctioned. Even a score of zero or -1 is usually fine. Some lenders will still run soft internal checks or KYC verification, but it rarely affects the outcome.
Loan Against Securities: A bit different. Because equity values move, lenders want a little more confidence in the borrower. Most prefer a score of 650 or higher, though certain NBFCs may go lower if your portfolio is solid and well-diversified. A score under 550 might still get through at some places, but you’ll likely see a reduced LTV offered rather than a flat rejection.
Personal loan, for context: 750+. No wiggle room at most mainstream banks.

That difference, between needing 750 and needing nothing at all, is why it’s worth knowing these options exist before you go applying for things that will pull your score down further.

Loan Against FD: Eligibility, Interest Rates, and Approval Process

Your fixed deposit doesn’t break. That’s the first thing to understand. A lien is placed on it, which means you can’t withdraw it while the loan is active, but the FD keeps earning interest, continues its tenure, and remains yours in every legal sense. You’re just borrowing against the value it represents.
Credit score requirement: For most banks, effectively zero. SBI, HDFC, ICICI, all of them have FD-backed loan products where the approval hinges on the deposit, not your CIBIL file. There may be KYC checks, there may be soft enquiries, but they’re usually formalities rather than gatekeeping.
How much can you borrow? In 2026, most major Indian banks will lend up to 90–95% of your FD’s value. If you have a ₹5 lakh FD, you could potentially access ₹4.5–4.75 lakh.
Interest rates: The standard formula is FD rate + 1 to 2%. If your deposit is earning 7%, your loan rate lands somewhere between 8% and 9%. Compare that to a personal loan at 18–24%, and the difference is stark; you’re paying roughly a third of what an unsecured loan would cost you.
How fast? Very. Many banks now process FD-backed loans entirely within their mobile banking apps, sometimes within minutes if your KYC is already complete. No branch visit, no physical paperwork in many cases, no waiting three days for someone to call you back.

Loan Against Securities: CIBIL Score, LTV, and Risks

Shares, mutual funds, and bonds can all be pledged as collateral under a Loan Against Securities, and the structure is broadly similar to the FD route. The difference is that a fixed deposit holds its value perfectly, while your equity portfolio doesn’t. Markets move. Sometimes sharply.

Credit score requirement: Lenders generally want to see 600–700. The securities are still collateral, but because their value can drop, the bank wants some reassurance that you’re not someone who defaults the moment things get uncomfortable. Under 550, you’re looking at a higher chance of either rejection or a significantly reduced borrowing limit.

LTV ratios in 2026 (post RBI/SEBI guidelines):

Equity shares and equity mutual funds: 50–75% of current market value

Debt mutual funds and bonds: up to 85%

The margin call, this matters more than most people realize: If the market falls hard and your portfolio value drops below a certain threshold, the bank can ask you, sometimes urgently, to either pledge more securities or repay a chunk of the loan to restore the LTV ratio. This is called a margin call, and it tends to happen at exactly the moment when markets are crashing, and you have the least liquidity available. It’s not common, but when it happens, it’s stressful. Keep a cash buffer somewhere.

Loan Against FD vs Personal Loan vs Loan Against Securities

Feature	Loan Against FD	Loan Against Securities	Personal Loan (Unsecured)
Min. CIBIL Score	Not Required	600 – 700	750+
Typical Interest Rate	8.5% – 9.5%	9% – 11%	12% – 24%
Processing Time	Instant	24 – 72 Hours	1 – 5 Days
Income Proof	No	Yes (Usually)	Mandatory
End Use	Any Purpose	Any Purpose	Any Purpose

Can a Loan Against FD Improve Your CIBIL Score?

Here’s something most people don’t think about when they’re in a low-score situation: a loan against FD isn’t just a borrowing option; it’s also a credit repair tool if you use it right.

Take a small loan. Doesn’t need to be large. Pay the EMIs on time every month for six to twelve months without missing a single one, and keep your utilization below 30% of the sanctioned limit. Credit bureaus track repayment behaviour, and a clean, consistent record, even on a modest secured loan, starts building your score upward in a way that nothing passive ever will.

It won’t fix years of damage overnight. But six months of clean repayment history on a secured loan will do more for your CIBIL score than six months of doing nothing and hoping it improves.

Things to Check Before Taking a Loan Against FD or Securities

The 2026 LTV ratios your specific bank is applying; these shift with RBI/SEBI updates and aren’t always the same across lenders

Whether you’re getting an overdraft facility or a term loan, the interest calculation works differently for each.

Your ability to handle a margin call if you’re going the securities route, if that scenario would wipe you out, keep a buffer

Your utilization discipline, borrowing 95% of an FD overdraft limit and sitting there, will hurt your credit score even though the approval didn’t require one.

Conclusion

If your CIBIL score is holding you back, don’t start by applying for a personal loan. A rejection doesn’t just mean no; it leaves a hard inquiry on your credit file, which pushes your score down further, which makes the next application harder. It’s a bad cycle to start.

Look at what you already have instead. A fixed deposit is probably the most straightforward collateral available to most Indian borrowers right now, with a low rate, fast processing, no income proof, and almost no credit score dependency. A securities portfolio gives you something similar while keeping your investments intact and working for you, as long as you’re comfortable with the margin call possibility.

Check the LTV ratios with your lender directly before you apply. They do change.

Interest rates, LTV ratios, eligibility criteria, and credit assessment policies differ across banks and NBFCs. Always confirm the current terms with your lender before proceeding.

Frequently Asked Questions

Will I keep receiving dividends and interest even after I pledge my assets?

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What if I want to sell my shares while they're pledged?

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Does running my FD overdraft at 95% capacity hurt my credit score?

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Is the interest I pay on a Loan Against FD tax-deductible?

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Can I borrow against an FD that's in my child's name?

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What if my FD interest rate changes while my loan is still running?

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Since your loan rate is pegged to your FD rate, typically, the FD rate plus 1 or 2 percent, a change in one technically affects the other. But here’s the practical reality: most fixed deposits run at a locked rate for their entire tenure, so unless your FD matures and gets renewed at a different rate mid-loan, your interest cost stays stable throughout. When renewal does happen, it’s worth checking what the new rate does to your loan pricing.

Can a Tax-Saver FD (5-year lock-in) be used as collateral?

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