Corona virus has caused outrage all over the world at this time. In the Coronad economy, many people's accounts have been emptied, all savings have evaporated.
On the other hand, in these odd situations friends or relatives are not getting any help. Don't worry if you have run out of money too.
In these bad times you can use the overdraft facility of the bank. Know what this facility is ...
Government and private banks offer overdraft facilities. Most banks offer this facility on Current Account, Salary Account and Fixed Deposit (FD).
Some banks also offer overdrafts in lieu of assets such as shares, bonds and insurance policies. Under this facility, you can take the money you need from the bank and later pay it back.
In this regard, the bank says that overdraft is given based on the account history and account value of the customers. Also, what is the credit behavior like?
On this, the bank says that it is much cheaper in case of credit card or other personal loan. You have to pay relatively less interest in it. The other advantage is that you have to pay interest only for the time you take the money in overdraft.
On the other hand, in these odd situations friends or relatives are not getting any help. Don't worry if you have run out of money too.
In these bad times you can use the overdraft facility of the bank. Know what this facility is ...
What is overdraft ?
Government and private banks offer overdraft facilities. Most banks offer this facility on Current Account, Salary Account and Fixed Deposit (FD).
Some banks also offer overdrafts in lieu of assets such as shares, bonds and insurance policies. Under this facility, you can take the money you need from the bank and later pay it back.
How to take advantage?
Some customers (preapproved) are given overdraft facility by banks or NBFCs right from the start, while some customers have to get separate approval for this. For this, apply in writing or through internet banking. Some banks also charge processing fees for this facility.
Two types of overdrafts
Overdrafts are of two types. One secured, the other unsecured. A secured overdraft is one for which some mortgage is pledged as security. You can get an overdraft on things like FD, shares, house, salary, insurance policy, bonds etc.
It is also called taking loans on FD or shares in easy language. In doing so, these things are pledged to banks or NBFCs.
If you do not have anything to offer as security, you can still take an overdraft facility. This is called unsecured overdraft. For example credit card
withdrawal.
How much money can I take?
Banks decide how much money you can take under an overdraft. This limit depends on what collateral you have in the bank for this facility. In case of salary and FD, bank limits are higher.
Who gets the facility?
In this regard, the bank says that overdraft is given based on the account history and account value of the customers. Also, what is the credit behavior like?
Why is it beneficial?
On this, the bank says that it is much cheaper in case of credit card or other personal loan. You have to pay relatively less interest in it. The other advantage is that you have to pay interest only for the time you take the money in overdraft.
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