Bank overdraft can be a better option than personal loan. Here we will tell you about its benefits.

Personal Loan vs Overdraft: When we get into a financial problem and we need money, the first thing people do is either think of a credit card or turn to a personal loan. This happens in a situation when we do not have any savings or emergency fund. In such a situation, banks easily give you a personal loan. But you have to pay more interest on it. Although it fulfills your need at that time, but an extra burden increases on you. In such a situation, you can use overdraft instead of personal loan. Let's know about it.

What is overdraft?

For information, let us tell you that almost all private and government banks provide overdraft facility to their customers. Banks offer overdraft on your current account, salary account and fixed deposit. Under this, customers can use cash as per their need.

 

Simply put, overdraft is also a type of loan, which is linked to your account. Let us tell you that many banks also provide you the facility of overdraft against their shares, bonds and insurance policies. Under this, you can take money when needed and return it later.

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How to avail an overdraft

The first question is who can get this facility. Let us tell you that the bank already provides overdraft facility to some customers. At the same time, some customers have to take permission from the bank later. For this, you can use the bank's online portal or app or apply in the bank.

Overdraft comes in two options secured and unsecured and some banks also charge processing fees for it. Talking about secured overdraft, for this the customer has to keep his shares, bonds, FD, house, insurance policy for security. On the other hand, if we talk about unsecured overdraft, then this facility comes in handy when you do not have any of the options mentioned above and you need money. In such a situation, you can take money from the bank even without security. If you want to take advantage of this facility, then you can inquire from your bank.