Banks launch overdraft service in Corona crisis? You can also take advantage of this way

Banks have launched an overdraft facility to meet the need for money in the Corona crisis. An overdraft facility is a facility under which you can withdraw money from your bank account even if you do not have it. Like a loan, in overdraft , a fixed amount of money is sanctioned by the bank to the customer in the form of a loan amount with a fixed repayment period. All you have to do is pay interest.

How do you apply

To avail this facility you have to go to the bank or apply online. The maximum bank charges a processing fee of one per cent of the total amount charged for the overdraft facility. The bank automatically makes this facility available to certain people. While some customers have to apply for it.

There is no obligation to pay EMI

There is no obligation to repay the overdraft in EMI like a loan. The customer can pay whenever he wants during his payment period. They can pay it in pieces or in full if they wish. The overdraft can be repaid without any charge before the payment period is over. Interest is calculated on a daily basis. The overdraft facility also depends to a large extent on the customer's relationship with the bank.

Usually four types of option

Overdraft on salary

The employed class can take an overdraft on their salary account. Overdrafts can be taken up to two to three times of celery. An overdraft facility can be obtained quickly and easily from the same bank where you have your salary account.

Overdraft on home loan

The bank also offers home loan customers overdraft facility. Overdrafts can range from 50 to 60 percent of the total value of the property. It also assesses the customer's ability to repay the loan and credit history.

Overdraft on insurance policy

You can avail overdraft facility by keeping your insurance policy with the bank as a guarantee. The amount of overdraft is determined on the basis of sum-assured of insurance cover.

Overdraft on careful deposit

An individual can also take an overdraft on his FD. Overdrafts can be obtained up to 75% of the total FD amount. The interest on it also seems low. Banks usually charge 2% more than the interest earned on FDs.