New Delhi: There are many such services of the bank that you may not know about. We are going to tell you about one such service. When you need money and you don’t have money. In such a situation, you ask for money from your friends and relatives. But now there is no need to do so. We are telling you about such a service of the bank, with the help of which you can get money easily when you need it.
If there is a problem of money, then you can take advantage of the overdraft facility provided by the banks. The overdraft facility of banks is similar to taking a loan, but for this you have to pay a lump sum amount, not in installments.
What is overdraft?
Overdraft is a financial facility, using which you can withdraw money from your bank account even when there is no money in it. An overdraft limit is fixed for each customer, which depends on the relationship with the bank. The customer can withdraw money only up to the prescribed limit. The bank charges interest on the money that is withdrawn as overdraft.
The interest rate on overdraft facility offered by private and public sector banks varies from applicant to applicant and depends on the loan amount required, the repayment tenure and the relationship with the concerned bank or financial institution. Explain that bank overdraft is very different from loan. The biggest difference between bank overdraft and bank loan is that in an overdraft, the interest rate is paid only on the amount utilized, whereas in a bank loan, you have to pay the interest rate on the entire amount.
Features of overdraft
Overdraft is a facility that can be availed by maintaining any bank account. Now many private banks are providing this facility to the salary account and savings account holders. The overdraft limit you will get is based on account history, payment record or credit score. It can also be considered as a short-term loan provided by the bank which needs to be repaid within a stipulated time.
how to apply
To avail this facility, you can go to the bank or apply online. Most banks charge a processing fee of 1% of the total amount charged for the overdraft facility. For certain customers, the bank provides this facility automatically, while some customers have to apply for it.
first published:Jan. 13, 2022, 2:44 p.m.