One of the most preferred loans is Overdraft Against Salary offered to salary account holders by various banks & NBFC's at competitive rates. If you are planning to avail of this credit facility, make sure you know about it well.
Features & benefits of Overdraft Against Salary
- Get a loan at attractive interest rates
- Quick processing
- Interest payable for withdrawn amount only
- Digital processing available
- One time processing fee
Also Read:-Project Finance
Eligibility criteria of Overdraft Against Salary
Age: - Applicant age should be above 21 & below 60
Work Experience: - You must have 3+ years of experience & latest 1 year should be with same organization.
Income: - Your minimal income per month must be above Rs. 30,000.
Documents required for overdraft against salary
1. Identity proof(any one of the following) -
- Aadhar Card
- Pan Card
- Voter ID
2. Residential proof (any one of the following) -
- Rent Agreement or Lease Agreement
- Ration Card
- Passport
- Electricity Bill
- Water Bill
3. Income Proof
4. Bank statement
Also Read:-SBI Personal Loan
How Overdraft Against Salary Works?
Mostly, bank itself select applicant based on credit profile & repayment history of an existing loan. If your credit history seems clear with no default, then you can also take an initiative to get this type of credit facility for emergency purposes of financial requirements, it works like a credit card bank will set a limit up to which you can withdraw & pay interest. Contact your nearest bank branch for further information.
Pros & Cons of overdraft facility against salary
Pros -
Minimal Documentation: - It gives you the comfort of less documentation to provide & lessens your time constraints.
Fast Processing: - As compared to another loan it takes a longer time period to get sanction & disbursement wherein an Overdraft facility is fast processing.
Low-Interest rates: - The best of this facility is interest is calculated for utilized amount only.
Cons -
Interest rates strategy:- Might be interest calculated for utilized amount, but interest rates are higher compared to other loans.
Unpredictable repayment:- Maximum tenure is up to a year but bank can ask for repayment any time depending on usage of limit & repayments.
Overall, this credit facility is best for emergency purposes. Get compared from different banks, Financeseva helps you to get the best deal according to your specific requirements.
Also Read:-Loan Against Property
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