Overdraft is a financial instrument to provide an extension of credit when the savings or current account balance reaches zero. Most of the banks offer an overdraft limit depending on the customer's existing relationship with the bank. Bank also charges the interest and fees on exceeding the overdraft limit of the accounts.
The overdraft facility provided by various banks and financial institutions can be utilised to reduce the amount of EMI on your loans. To use the overdraft facility, borrowers can utilise the surplus funds in the savings or current account of the loan taken. The surplus amount over EMI deposited in that account will be considered as a prepayment of the loan and can reduce the outstanding principal amount. As the outstanding amount of loan reduces, the amount of interest will be calculated on a lower amount, thus reducing the interest outgo of the loan as well. The surplus amount added in the overdraft account can be withdrawn at any time and the outstanding amount will be rebalanced accordingly.
Following documents are required to process your loan
