Know what is the overdraft service of banks, this is how you can avail benefits
Banks have introduced overdraft facility to meet the money requirement in Corona situation. Overdraft facility is the facility under which you can withdraw money from the account even if there is no money in your bank account. Like a loan, in overdraft, a certain amount of money is sanctioned by the bank to the customer as a loan amount with a fixed payment period. For this, you will have to pay interest.
How to apply
To avail this facility, you have to go to the bank or apply offline. Most banks charge a percentage of the total amount charged for the overdraft facility as processing fee. The bank makes this facility atticable to certain people, while some customers have to apply for it.
No obligation to pay EMI
Overdraft is not obligated to be repaid in MMI like a loan. The customer can do it whenever he wants during the payment period. It can be cut into pieces, or outright. Repeats can be made without overdraft even before the payment period is over. Interest is calculated on a daily basis. The facility of overdraft also depends to a large extent on how the customer has a relationship with the bank.
Usually four ways
1. Overdraft on salary
Working class can take their salary and overdraft. An overdraft of two to three times the salary can be taken. Overdraft facility can be availed quickly and easily from the bank in which you have a salary account.
2. Overdraft on home loan
Banks also provide overdraft facilities to home loan customers. Overdrafts can be found in 50 to 60 percent of the total value of the property. For this, the ability of the customer to repay the loan and credit history is also assessed.
3. Overdraft on insurance policy
You can take the facility of overdraft on your insurance policy by keeping it with the bank as a guarantee. The overdraft amount is decided on the basis of even-insurance cover.
4. Overdraft on fixed deposits
An individual can also take an overdraft on his Fixed Deposit (FDI). Overdraft can be up to 75 percent of the total amount of FD. Interest on this also seems low. Banks usually charge two percent more than the interest earned on FDs.
Reserve Bank of India said- SBI, HDFC and ICICI cannot be given to bank