Good news for all SBI customers! yow You can withdraw more money than your account balance
There is good news for customers of the country’s largest bank SBI (State Bank of India). Now State Bank customers do not have to take tension for money. Now customers can withdraw more money from their bank deposits. The bank is providing overdraft facility to its customers with easy procedure. Keeping this in mind, India TV Paisa’s team is going to tell you how you can easily withdraw more money from your deposit in the form of overdraft.
What is an overdraft facility?
Overdraft facility is available for the account holders who are in need of money. In other words, an overdraft is a loan. Customers have to pay interest on this. The thing to note here is that interest is calculated on a daily basis. Also, there is a need to repay this overdraft within the stipulated period. Not only banks but non-banking financial companies (NBFCs) can also facilitate overdraft. Depending on your goodwill or goodwill, banks or NBFCs decide how much overdraft you can get.
How to get an overdraft
We have already told you that banks decide the amount of overdraft according to the credit of the customer. Some banks offer preapproved overdrafts to their select customers. But most customers have to get approval from bank or NBFC for overdraft. Earlier you had to apply for this in writing, but in the era of digital banking, you also have the option to apply through internet banking. Some banks also charge processing fees for this facility.
What are the types of overdrafts
Overdrafts are usually of two types. First secured overdraft and second unsecured overdraft. 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. When doing so, it subsides with banks or NBFCs.
What is unsecured overdraft
If you do not have anything to offer as security, you can still take an overdraft facility. This is called unsecured overdraft. With example credit card withdrawal.
Overdraft is different from loan
An overdraft is similar to a loan but has different conditions than a loan. In the event of a loan, you have to pay a prepayment charge if you repay it before the stipulated period. But this is not the case with overdrafts. You can repay the money even before the fixed period without paying any charge. Along with this, the interest has to be paid only for the time, as long as the overdraft amount remained with you. You can repay the money anytime within the stipulated period. There is also no hassle of EMI in this.