NewsBytes
    Hindi Tamil Telugu
    More
    In the news
    Narendra Modi
    Amit Shah
    Box Office Collection
    Bharatiya Janata Party (BJP)
    OTT releases
    Hindi Tamil Telugu
    NewsBytes
    User Placeholder

    Hi,

    Logout

    India
    Business
    World
    Politics
    Sports
    Technology
    Entertainment
    Auto
    Lifestyle
    Inspirational
    Career
    Bengaluru
    Delhi
    Mumbai

    Download Android App

    Follow us on
    • Facebook
    • Twitter
    • Linkedin
    Home / News / Business News / Need instant cash? India's overdraft facility might be your answer
    Summarize
    Next Article
    Need instant cash? India's overdraft facility might be your answer
    Refer to this guide

    Need instant cash? India's overdraft facility might be your answer

    By Sanjana Negi
    Jan 07, 2025
    07:47 pm

    What's the story

    Need a quick cash boost without the hassle of a traditional loan? Overdraft facilities in India offer the perfect solution.

    This financial safety net allows you to dip into your account beyond its balance, giving you the flexibility to manage unexpected expenses or short-term cash flow issues. Whether you're an individual or a business, an overdraft can be a game-changer, making financial management simpler and more efficient.

    Let's dive into how it's become a go-to tool for many.

    Mechanics

    How overdraft works

    An overdraft allows account holders to withdraw more than their balance up to a certain limit and for a specific period.

    Interest is applied only to the negative balance utilized, not the whole amount like in loans.

    Although rates are higher in OD, it provides the advantage of repayment flexibility within the stipulated timeframe.

    Qualification

    Eligibility criteria for overdraft

    In order to be eligible for an overdraft facility in India, applicants need to fulfill certain requirements stipulated by their bank.

    These typically involve possessing a positive credit history, demonstrating regular income or cash flow through their account, and potentially offering collateral based on the overdraft amount.

    For businesses, they may be required to submit further documents like balance sheets and profit and loss statements to establish their financial stability.

    Varieties

    Types of overdraft facilities

    There are primarily two types of overdraft facilities in India: secured and unsecured.

    Secured overdrafts necessitate collateral like fixed deposits, property, or securities against the loan amount. Because they minimize the risk for the bank, they generally have lower interest rates.

    Unsecured overdrafts do not necessitate any collateral. However, they have higher interest rates to compensate for the increased risk to lenders.

    Management

    Tips for managing an overdraft facility wisely

    Handling an overdraft responsibly entails monitoring withdrawals and deposits to prevent exceeding your limit and incurring high fees.

    It's intended for short-term use, not as a long-term solution, due to its higher cost compared to other forms of credit like personal loans or credit cards.

    Establishing low balance alerts can assist in managing it more effectively.

    Facebook
    Whatsapp
    Twitter
    Linkedin
    Related News
    Latest
    Finance

    Latest

    Pakistani drones intercepted in Jammu again; blackout in several districts  India
    Carlos Alcaraz returns to form at Rome Masters after injury Carlos Alcaraz
    Michael Vaughan suggests UK as potential venue for IPL 2025 Michael Vaughan
    Arsenal's Mikel Arteta warns fans about potential striker signing challenges Mikel Arteta

    Finance

    Unraveling emergency contacts in digital banking Lifestyle
    Empowering women in India: The role of financial literacy Lifestyle
    Understanding home rental insurance in India Lifestyle
    Navigating zero-interest financing in India Lifestyle
    Indian Premier League (IPL) Celebrity Hollywood Bollywood UEFA Champions League Tennis Football Smartphones Cryptocurrency Upcoming Movies Premier League Cricket News Latest automobiles Latest Cars Upcoming Cars Latest Bikes Upcoming Tablets
    About Us Privacy Policy Terms & Conditions Contact Us Ethical Conduct Grievance Redressal News News Archive Topics Archive Download DevBytes Find Cricket Statistics
    Follow us on
    Facebook Twitter Linkedin
    All rights reserved © NewsBytes 2025