Business Desk. Many times people face such a situation that the bank account is not amounted as per the requirement. As such, a lot of trouble has to be faced. There is a need to take a loan, but it is not necessary to get a loan easily on time. Banks have provided a special facility for this difficult situation. This facility is similar to a loan, but in many cases it is different. Know about it.Â
Overdraft Facility
Despite the insufficient amount in the account, customers can take money as per the requirement through the facility of overdraft (OD). For this, some important conditions have to be followed.
All banks offer
overdraft offered by banks and non-banking financial institutions. Like loans, in overdraft, a certain amount is sanctioned by banks as a loan for a fixed period by the customers.
The difference between loan and overdraft is
paid to the customer in full and the interest is to be paid from the first day of receiving the amount. At the same time, in the overdraft facility, the customer can withdraw money according to his need from the sanctioned amount. In this, he has to pay interest only on the amount he has withdrawn.
Processing Fees Like
loans, overdraft also attracts processing fees. Interest and fees are charged from the day the customer starts using the overdraft limit.
How to withdraw money from overdraft The
overdraft is linked to the customer’s savings or current account, so that the customer can withdraw the overdraft amount as per the requirement and then deposit it. Overdraft is different from balance in savings or current account.
Limit of overdraft
Under this facility, the customer can withdraw the cache up to the limit of overdraft if there is no money in his savings or current account. The limit of overdraft is determined by the need for customs and what is the policy of the bank in this regard.
Refund of money under
overdraft There is no obligation to repay the amount taken under overdraft in EMI like a loan. Customer can repay it whenever he wants during the pre-determined period. He can repay it either in installments or outright. If he wants, he can pay the overdraft money before the completion of the period without paying any charge.
Money can be withdrawn
If someone has already deposited the amount taken under the overdraft facility, he can withdraw the money again if needed again during the period of repair. This can result in savings in interest. Under this facility, interest is calculated on a daily basis.
What to pay? In order to
avail the facility of security overdraft, the customer has to mortgage some bank in FDs, shares, property, salary, insurance policies, bonds. It can also be called taking loans on FDs or shares. Some banks also provide overdraft facility on salary. This facility can also be taken jointly. In such a situation, both have the responsibility of paying the money. At the same time, if one cannot repay an amount, then the other has to pay the entire amount. If the amount cannot be repaid, then the mortgaged items will be at risk.
