New Delhi: Indian banks offer an overdraft facility using which individuals can take advance from the bank. The facility can be used in case of a financial emergency as one can take the advance even without having a single penny in the bank account.
In actuality, the overdraft facility is basically a short-term lending facility that allows bank’s customers to take a small loan to sail through emergencies.
Which banks offer overdraft facility?
State-owned banks such as the State Bank of India (SBI) as well as one of the country’s top private lenders, ICICI Bank, are offering overdraft facility to their customers across India.
How much can you withdraw using overdraft service?
Customers of the bank can avail an advance of up to three times of their monthly salary in times of crisis by using the banking service. However, each bank has different limits, which also depends on the financial profile of the customer.
If you’re a salaried individual then you must have received several messages from the bank related to the overdraft facility. Banks usually tell their customers in advance about their limit of using the service.
Moreover, the service is not even provided to all salaried individuals, and in some cases, the bank only lends a percentage of the monthly salary of the employee.
Conditions of bank overdraft facility
The terms and conditions of the service are a bit complex. First of all, only select banks in India currently offer overdraft facilities to individuals. Secondly, the service is provided to salaried individuals who have a salary bank account with the bank.
Most importantly, the bank also takes a peek at the credit score of the customers before disbursing the advance in the bank accounts. Those who meet the conditions can easily use the bank facility to handle any sudden financial trouble. Also Read: Aadhaar card update: Don’t like existing photograph? Here’s how to change photo in Aadhaar
How much interest do the bank charge?
Interest rates on advances taken under the overdraft facility differ from bank to bank. In most cases, bank charges anywhere between 1% to 3% interest rates on advances taken using the overdraft facility. Also Read: Google launches Pixel Buds A-Series in India, check price, features and more
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