It refers to an arrangement whereby the bank allows the customer to overdraw from its current deposits account within

a specified limit . The overdraft facility is granted against the securities of assets or personal security as in within a specified limit The bank should obtain a written request from the customer

Customer should settle the terms and conditions and the rate of interest chargeable

Bank overdraft are flexible Interest to be paid on funds used Arranged quickly No pre payment of bank overdraft

PUTTING YOUR HOUSE AS SECURITY The house will be valued by the bank after proper survey and then approve an overdraft facility upto 50%-60% of the estimated value of the house

BANK FD AS SECURITY if you put your fixed deposits as security then you are eligible to get an overdraft limit which is almost 70% of the value of fixed deposits

Life insurance, equity and salary as security if you put your life insurance policy as security with the bank you will be eligible to take an overdraft facility which is more than that of the facility which you can avail against your house property . Banks give lower percent against equity due to there volatile nature . Banks offers and overdraft against monthly salary .

There is not much difference between a loan and a overdraft facility as far as the process of application is considered both of them are granted when you put some asset as security with the bank The bank levy a processing fees of 0.5%-1% wjth a cap of rs 25000 along with the security this facility is given for an year after which the bank review the assets put as security . The overdraft fees are payable annually .

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