Overdraft

Overdraft

Understanding Overdraft Facility

A personal overdraft is a financing option provided by private and public sector banks that allows you to withdraw funds as needed. Borrowers have the option of repaying the taken funds whenever it is convenient for them. The interest rate is only applied to the portion of the overall sanctioned limit that has been used.

Features of Overdraft Facility

• An overdraft facility is a service that can be used by anyone who has a bank account.
• This service is currently available from a number of private sector banks for both salary and savings account holders.
• The money extension is issued based on the account value, repayment history, or credit score of the consumer.
• It is a type of bank-issued short-term credit that must be repaid within a certain amount of time.
• Interest is charged on the credit amount or overdraft for the period of use, which can range from a few days to a few weeks.
• The bank sets the repayment period and has complete control over the account and its use.
• Current accounts and cash credit accounts are only eligible for a maximum of Rs. 50,000 per week, according to RBI regulations.

 

Documents Required

• Passport-sized photos.
• PAN card for the business.
• Documents proving your identification: Passport, driver's licence, voter's ID card, PAN card, Aadhar card.
• Address proof: Passport or utility bills (water/electricity bills) of the applicant.
• Passport or Class X certificate as proof of age
• Bank statement over the last 12 months
• Any other documents that the lender requires.