The country’s largest government bank SBI (State Bank of India) takes special care of all the facilities of its customers. Therefore, the bank has given information about its facilities in details on the website.
Sometimes money is needed suddenly. There is no money in the account to fulfill it. In such a situation, a person first asks for help from friends and relatives. If there is no help from there, then often people take help of credit card or apply for personal loan. The rate of interest in personal loans is very high. In such a situation, the compulsion often becomes tension. That is why today we are telling you about the special feature of SBI overdraft.
What is an overdraft – All banks in the country give an overdraft facility. 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 an overdraft facility 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 pay it later.
Who gets overdraft facility in SBI
According to the information given on the SBI website, if the regular salary is deposited in your salary account, then that customer can use the overdraft facility.
How to get overdraft facility
To service an overdraft, you have to apply to the bank. Many banks also provide this facility in their app.
If there is no FD in your bank, then first you have to pledge any assets in the bank. After that, on fulfilling the conditions, banks give you an overdraft facility.
Nowadays many banks already offer overdraft facility to their good customers. When this happens, then it becomes very easy to take a loan.
How much money can someone take in an overdraft?
Your bank will decide how much money you can take under overdraft. This limit depends on what and how much collateral you have in the bank for this facility. In case of salary and FD banks limit the bank.
In simple words, if you have FD of 2 lakh rupees in your bank, then the bank can fix the limit of 1.60 lakh rupees (80%) for overdraft. In the case of shares and debentures, the limit can be 40 to 70 percent.
How is it different from an overdraft facility loan?
When you take a loan, there is a fixed period for repaying it. If a loan is repaid before the term, then it has to pay a prepayment charge but this is not the case with an overdraft.
You can pay money even before the fixed period without paying any charge. Along with this, the interest has to be paid only for as long as the overdraft amount remained with you.
Apart from this, you are also not obligated to pay money in EMI. You can repay the money anytime within the stipulated period. Due to these things, it is cheaper and easier than taking a loan.
Will those with joint accounts also get this facility
Banking experts say that joint account holders can also take advantage of this facility. In such a situation, both will also have the responsibility to repay the money, while if one is unable to repay the amount, the other will have to pay the entire amount. Also Read: Gold Rate Today: Gold became cheaper today after three days, silver also rolled down, learn new prices quickly
What is the benefit of overdraft?
In case of credit card or other personal loan, it is much cheaper. In this, you have to pay relatively less interest. Another advantage is that for the amount of time you take money in overdraft, you have to pay interest for the same amount of time. Personal loan is available for a fixed period. You may have to pay a penalty if you repay it ahead of time. Apart from this, in personal loans you also have to bear other expenses like processing charge.
