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Anyone Have Overdraft from a Savings Account?
- Thread starter dhiraz
- Start date
Solution
Yes, you can get it. But in most of the cases, OD will attract interest. It is more like an unsecured loan. So check with your bank regarding the charges for OD. - In your case just the OD is pre-approved. they have not mentioned anything about the charges.
OD helps in cases where your balance drops below zero. Like in case of any standing instructions or cheque issues, if the balance is not there banks charge penalties and cheque bounces can lead to legal issues. OD will help you there. Some banks offer OD free of charge up to a limited duration, Check regarding that and opt for it if required.
Quantum
TF Premier
Most of the banks has this facility, and they keep offering it via their apps/websites because this is similar to a personal loan. It usually has high interest rates.
Do you need it?
Please note that it does get reported to CIBIL and other CICs as Ready credit account/Overdraft Account under "Loan" category.
Other lenders would look at it as "personal loan".
IMHO, don't go for OD facility unless otherwise no other option.
Do you need it?
Please note that it does get reported to CIBIL and other CICs as Ready credit account/Overdraft Account under "Loan" category.
Other lenders would look at it as "personal loan".
IMHO, don't go for OD facility unless otherwise no other option.
D₹V
TF Prestige
dhiraz
TF Ace
I Personally Like OD or Credit Line over Personal Loan
Because They Are Easy To Access Money It Taken Already and After Paying Full Can Be Taken Next Time Without any Hassle
I Have Already Taken Idfc First Money. Whenever I Need Some Funds They Gave Me Instantly in My Bank Account. So I Find This Quite Useful
OD can help you to avoid some stupid penalties imposed by banks, especially in the case of Standing Instructions and cheques. Hence it is always safer to have it - especially people who do a lot of transactions/turnovers. In many cases, the interest for these ODs will be far less than the cheque bounce penalties (if OD is cleared immediately in 1-3 days). And if OD is offered free of charge, it is all the more good.
But intentionally letting the balance go in negative and using the OD more like a credit card is very bad and one would end up paying 15- 25% interest.. - Which is a bad financial choice.
panchabhut
TF Ace
I also have this offer for last 2-3 years. They keep sending mail also. But never really thought of activating it. The base account is a salary account. When I started working, my father advised to always keep 1 mth salary in acct for emergencies. Still following it even after all these years.
dhiraz
TF Ace
I Think There is No Charge for Activating
Only Charged When We Utlise The Amount Like If 10k Widthrawl 2%+GST & 17% p.a.
Quantum
TF Premier
Your mileage may vary.
And if people didn't need these services, then financial institutions wouldn't have come up with these.
So yeah, there are people who need these, and there are the providers.
I'm not against OD or ready credit account. It's just that these services are "easily" available tools to get screwed up pretty fast if one is not disciplined about spending. It's easily available, and once someone not so serious about their finances slips the payments, or goes into an endless loop of withdrawing/paying, it becomes a mess.
And it is true for any type of credit or loan. One has to be conscious of their choices and decisions. The OD/ready credit account are slippery roads. These can make people spend more than they earn.
I mostly assume that people visiting this forum want to build a healthy and balanced credit/financial history while drawing the best benefits of products and services. And I try to keep my suggestions aligned to this.
Quantum
TF Premier
My response was actually aligned with the above point of yours. If someone is not financially disciplined, they can mess it up, pretty quick.
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panchabhut
TF Ace
My userstanding is that 2%+gst is applicable on activation as the facility (loan) is immediately extended. 17%+gst is applicable on the amount actually utilised.
dhiraz
TF Ace
This is the beauty of this platform Anyone Can Learn from other's Personal Experience
I also learned many things from this community & and great people's point of view like you 👍
dhiraz
TF Ace
Ohkey!
When I Took IDFC First Money They Charged 1% + GST & 17% Reducing Interest on The Utlised Amount
I will share my experience here. I have a zero balance savings account from Canara bank. My bank balance was 0.13 and they added a 1 rupee overdraft few days ago. It says “Debit interest capitalised” in the description. I have added 10k in that account now but they made a cibil hit on my pan which reads “temporary overdraft” and it is listed as unsecured loan. The amount mentioned is 1 rupee.
What happened here in my case ? Can’t understand what and why they did this. I got no sms or notification for any of this.
What happened here in my case ? Can’t understand what and why they did this. I got no sms or notification for any of this.
dhiraz
TF Ace
This is like a credit line which you can take in your bank account
Suppose you have pre-approved 2L Limit you can take any amount like 5k 10k 50k 1L upto approved limit.
When you widthral any amount they Charge flat 1% + GST as Processing fee and 17% interest p.a. on the principal amount.
They offer tenure from 2 month to 48 month
I initially activated by widthral 5k and pay it back instantly 5052.
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