Overdraft Loan

Overdraft Loan Features:

• Easily Accessible: You can access overdraft facilities by simply having a bank account.
• Easily Accessible: Overdraft facilities can be had with just having an account with the respective bank.
  Widely Available: Currently most of the Private Banks offer the overdraft facilities for both salary and the saving account customers.
• Based on Account Value: Your overdraft is contingent on aspects such as your account balance, history, or scores in credit.
• Short-term Credit: They are a short term offer from the bank and usually for a limited period only.
  Interest on Usage: Interest is charged on the amount you have utilized which may take few days to few weeks.
• Repayment Terms: The bank determines the period taken to repay the amount and fully controls the account together with the way it is used.
• Regulatory Limits: Let’s remind the rules of RBI: current and cash credit accounts can obtain the overdraft of Rs. 50, 000 per week.

Benefits:

• Flexible Cash Use: It can be utilised in smaller amounts as when required; this is why it is called an overdraft facility.
• Immediate Cash Solutions: It is useful in undertaking to meet emergencies such as situations whereby an individual lacks cash.
• Cash Flow Management: Its useful in the management of the cash for a business enterprise.
  Interest Only on Used Amount: The interest you pay is calculated on the basis of the amount you actually //utilize out of the line of credit.
• Minimal Paperwork: Overdraft loans are normally done with less paper work.
• No Collateral Needed: Banks and NBFCs do not demand any forms of security like other loans when procuring overdraft facilities.
• Short-term Borrowing: These overdraft limitations are generally checked and decided on an annual basis, and are therefore considered giving short term financing.