What is over draft loan?
Generally this over draft loan will not be available in all banks,this loans deals with the name it insists like over draft meaning more than original amount.
For instant if a person have 1 lakh rupees in his savings account and if his over draft limit is 50 thousand rupees then an individual can with draw Rs.150000/- and he have to repay his loan according to agreement of the bank and individual
Over draft loan most of times deal up and should have complete agreement based on employer of that person who is acquiring loan or completely based on his salary capability
For example if a persons individual salary package is around 15 lakhs of his gross then bank may approve loan according to his salary and
can issue over draft loan
Loan arrangement under which a bank extends credit up to a maximum amount (called overdraft limit) against which a current (checking) account customer can write checks or make withdrawals. The most common form of business borrowing, an overdraft is a type of revolving loan where deposits (credits) are available for re-borrowing, and interest is charged only on the daily overdraft (debit) balance. It is, however, also a demand loan: the facility can be cancelled (and entire outstanding amount ‘called’) at any time by the lender at its discretion, without any warning notice or explanation. If the overdraft is secured by an asset or property, the lender has the right to foreclose on the collateral in case the account holder does not pay.
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