Salary Overdraft: This facility comes in handy when your EMI is to be deducted or SIP is to be known or a check has to be cleared, or an emergency comes, but there is no money in your account.
New Delhi: Salary Overdraft: If you need money suddenly in an emergency, what are your options, either you borrow from friends, relatives or apply for a personal loan. Now you don’t need to do this. Because if you are a salaried employee then you can take advantage of salary overdraft.
Know what is salary overdraft
Salary credit is credited to your account every month, so you can check with the bank whether you are eligible for overdraft or not. If you are eligible for an overdraft as per the terms and conditions of the bank, then your money crunch will be eased immediately. Actually, salary overdraft is a type of revolving credit, which you get on your salary account. Whenever you need extra money other than salary, you can withdraw a little extra amount from your salary account.
Who gets overdraft
One thing to note is that not all bank customers get this facility. The bank gives the facility of overdraft only after looking at the credit profile of some of its customers and its company. If you banks like ICICI Bank, SBI give overdraft facility to their customers. You can check the customer care of your bank about how much amount you can withdraw from the account as overdraft.
Pre-determined limit
Usually, the bank keeps informing its customers through messages or e-mails that they can take the facility of overdraft. The limit of this overdraft is already decided by the bank. This facility of salary overdraft is very useful when there is a sudden expenditure. If your EMI, SIP or any check is attached, then there are chances of it getting bounced. But this dilemma can be avoided by availing the facility of overdraft.
What is the salary overdraft limit?
Every bank has different rules and interest rates for salary overdraft. Many banks already offer overdraft facility to their good customers. Some banks offer overdraft facility up to 2-3 times your monthly salary. Whereas some banks provide this facility only up to 80-90 percent of a month’s salary. Some work on the rule of overdraft cap for the bank. Its maximum limit can be up to Rs 4-5 lakh. For some banks, this cap goes up to Rs 1-1.5 lakh.
This is a kind of Instant Loan
Overdraft is a kind of instant loan only. For this you also have to pay interest. Processing fees are also to be paid. Like ICICI Bank provides the facility of ‘Instaflexi cash’. For this, customers do not have to go to the branch of the bank. It can be activated online only. Under this facility, customers can take an overdraft up to three times their salary.
This facility gets instant approval. Customers can also start using the overdraft limit within 48 hours if they wish. For this you also have to pay interest, this interest will not be charged on the approved amount of overdraft. Instead, the amount will be charged only on the amount that is withdrawn from the account.
How much are interest rates
Its interest rates are as high as a credit card. In case of salary overdraft, interest of one to three per cent may be charged every month. That is, the amount of money you withdraw from the salary limit attracts interest from one to three every month i.e. 12 to 30 percent annually. Apart from this, if you do not pay the interest on time, there is also a penalty. It also becomes expensive because of the processing fee.
