What is an Overdraft and how does it work?
What is an Overdraft and how does it work?
In the time pandemic, an economic crisis arose all over the world. During this time people either broke their deposits or knocked on the doors of the banks. At the same time, some banks also provided overdraft facilities to their customers. Here we are giving you complete information about this facility -
What is an overdraft?Through an overdraft facility, you can withdraw money from the account even if you do not have money in your bank account. This is a type of loan that allows customers to withdraw more money than the balance in their bank account. However, the withdrawn amount along with interest has to be repaid within the stipulated period. Interest is calculated on daily basis. During this time, what will be the limit of overdraft you will get, it is decided by the bank or NBFC. That is, this limit may be different in different banks and NBFC's.
How to apply for an overdraft?To avail overdraft facility, you have to apply online or by visiting the bank. Most of the banks charge a percentage of the total amount charged for the overdraft facility as a processing fee. The bank provides this facility to certain people automatically, while some customers have to apply for it.How many types of options are available on an overdraft?There are four types of options available on overdraft. These include overdraft on salary, overdraft on a home loan, overdraft on the insurance policy, and overdraft facility on FD.The interest rate on the overdraft facility offered by private and public sector banks is different for the applicants. This interest rate depends on the desired loan amount, repayment tenure, and relationship with the concerned bank or financial institution.
In the time pandemic, an economic crisis arose all over the world. During this time people either broke their deposits or knocked on the doors of the banks. At the same time, some banks also provided overdraft facilities to their customers. Here we are giving you complete information about this facility -
What is an overdraft?Through an overdraft facility, you can withdraw money from the account even if you do not have money in your bank account. This is a type of loan that allows customers to withdraw more money than the balance in their bank account. However, the withdrawn amount along with interest has to be repaid within the stipulated period. Interest is calculated on daily basis. During this time, what will be the limit of overdraft you will get, it is decided by the bank or NBFC. That is, this limit may be different in different banks and NBFC's.
How to apply for an overdraft?To avail overdraft facility, you have to apply online or by visiting the bank. Most of the banks charge a percentage of the total amount charged for the overdraft facility as a processing fee. The bank provides this facility to certain people automatically, while some customers have to apply for it.How many types of options are available on an overdraft?There are four types of options available on overdraft. These include overdraft on salary, overdraft on a home loan, overdraft on the insurance policy, and overdraft facility on FD.The interest rate on the overdraft facility offered by private and public sector banks is different for the applicants. This interest rate depends on the desired loan amount, repayment tenure, and relationship with the concerned bank or financial institution.