Salary Overdraft is like an instant loan in which money is credited to your account within minutes. The bank fixes its pre-approved limit for its salaried individuals.
The bank provides you with an overdraft limit.
Salary Overdraft: Many times it happens that you suddenly need money and you are short of funds. In such a situation, even if you apply for a personal loan, it may take 2-3 days. In these circumstances, you need an instant loan. If you do a job, then the bank gives the facility of salary overdraft to its customers, under which you get the money within a few minutes. This is called Salary Overdarft.
Salary overdraft is a kind of loan. In this you can withdraw more money than your account balance. Both government and private banks provide this facility, but the terms and conditions are different regarding this. Bank provides you overdraft limit on the basis of all these points like how is your relationship with the bank, how much is your salary and how good is the CIBIL score.
Withdraw money in minutes
This overdraft is pre-approved and has a limit. You can withdraw money up to the limit at any time within minutes. With these money, you can avoid incidents like medical emergency, EMI, check bounce, SIP bounce. Every bank has its own rules for overdraft facility.
Different rules for different banks
Some banks offer overdraft facility up to 2-3 times your monthly salary. At the same time, 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. Some banks provide this facility on the basis of your monthly salary, while some banks fix a limit for every customer.
interest rate is high
Overdraft is similar to an instant loan in a way. For this you also have to pay interest. However, before using the facility of salary overdraft, it is important to keep in mind some other aspects as well. For example, if you use this facility then processing fee is also applicable. The interest rate is higher than that of a personal loan. Another thing to note is that the repayment of overdraft is not like EMI. You can pay it off gradually and the interest is charged only on the amount you have availed.
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