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Home loan overdraft facility know features of home loan OD and eligibility criteria

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Bank overdraft service: Need money suddenly? Get loan against your bank account balance, know about overdraft facility

Interest is not charged on the entire loan amount, banks provide this special service on your savings account


Under the overdraft loan, the customer can get a loan of up to Rs 5 lakh to Rs 5 crore. Salaried and self-employed people can take advantage of this facility. The loan amount depends on the profile of the creditor. Also Read: Why black stripe on the back of the debit-credit card? Know its role and connection with CVV

What can be better for the customer than this that the entire loan amount does not attract interest. Interest had to be paid only on the amount of loan money spent. Banks provide such facilities to their customers. Many times it happens that suddenly a big expense falls on the forehead, which is not prepared beforehand. In such a situation, if there is no emergency fund, then a big problem arises. To deal with such expenses, banks offer a special type of loan to their customers, which is called Loan Overdraft Facility. If this loan is taken for house expenses, then that home loan overdraft facility will be called home loan overdraft facility. Also Read: Loan From Aadhaar: You can take personal loan from your Aadhar card, know how… here is the complete process

In simple words it can be understood as follows. Suppose a person named Ramesh has taken a home loan from a bank or financial institution. Ramesh not only has to repay the loan amount, but also has the liability of EMI. Suddenly Ramesh needed a huge expenditure and he could not pay the home loan EMI. To get out of this messy situation, Ramesh contacted his bank from where he has taken home loan. The bank suggested to Ramesh that the best way to get out of this difficult situation is to take an overdraft loan. There is no problem in taking it as it can be easily availed as against the earlier loan.

The staff of the bank explained to Ramesh that it is better to take a loan from his own bank than to extend his hand to someone else. This will be for short term and the emergency requirement will be met. Many banks also call this facility as a top up loan. It can be availed against your existing home loan or against loan against property. Taking an overdraft loan is easy as the bank allows it to be withdrawn from the customer’s savings account or current account. The biggest thing is that interest will have to be paid only on the amount of loan that you use.

Features of this loan facility

  • When needed, you can withdraw funds from the bank. no paperwork involved
  • You can take up to 90% of your home loan as an overdraft
  • Interest will have to be paid only for the part of the amount of loan taken in the overdraft.
  • Under this, the loan money goes from the bank to the customer’s savings or current account, from where the customer withdraws the money he needs.
  • There is no lock in period in this loan facility. Customer can close the overdraft account whenever he wants
  • Banks do not set any eligibility conditions for granting this loan.
  • Banks look at the financial position of the customer and accordingly fix the overdraft loan limit

How much loan can I take

Under the overdraft loan, the customer can get a loan of up to Rs 5 lakh to Rs 5 crore. Salaried and self-employed people can take advantage of this facility. The loan amount depends on the profile of the creditor. A customer can take an overdraft loan for business and personal needs. Taking an overdraft on a home loan is more beneficial for people whose income is not fixed. Those in whose hands money keeps coming and going, they can take advantage of this scheme. This facility is considered best for the businessman.


People with fixed income can also take advantage of this loan facility, especially when there is no job or due to some reason the job has been lost. The money of the overdraft loan comes into the savings account of the customer, from which he can spend the money as per the need. Interest is to be paid on the money spent on this expenditure. By depositing money in the savings or current account, the customer can withdraw money whenever he wants. If more money is needed then there is no tension for that too.

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