How would you feel if you had an all-weather friend from whom you could borrow money whenever you needed? Well, now you can have one. With Personal Overdraft facility, you can get credit on the go, and pay it back as per your convenience. There is no need for tedious formalities and paperwork. Once your Overdraft Account is setup disbursements take a couple of Business Hours.

Even though a Payday or Advance Salary Loan looks to be a good option a Personal Overdraft is better in many ways.

Here are the reasons why Personal Overdraft is a better option than Payday Loans:

1) No Limitations

No Limits on personal Loan

Payday Loan are short-term loans that can be used for smaller loan amounts. Generally, the tenure allowed for Payday Loans is also shorter – between 5 to 60 days. The maximum loan amount is also Rs. 30,000 to Rs. 40,000. However, when it comes to Personal Overdraft, then the tenure could be as long as 60 months. You can also request for higher withdrawal limits on your account, which can easily cross the Rs. 50,000 figure.

There is no benefit in a Payday Loan when it comes to limits, especially when you have a better alternative, i.e. Personal Overdraft. After all, in the hour of need, when you require money, you don’t want to restrict yourself to a limit, either on the amount or the duration of the loan.

2) Lower Interest Rates

Payday Loans generally have very high interest rates upwards of 30 percent. Some companies will charge you as much as 50 percent. The rules associated with them are also quite unforgiving. For instance, if you fail to pay the loan within the tenure then the penalty can be significant. Personal Overdraft, on the other hand, is easier on your pocket, and its interest rates are also affordable.

One major advantage that Personal Overdraft (PO) has over Payday Loans is its basic structure. Imagine you recently moved to a new city, and to purchase the furniture for your new home you took a Payday Loan. However, your better half has to go out of the city for some work, and now you can’t spend the money until they come back. All this time interest is being accumulated on money which is of no use to you yet. However, if you had Personal Overdraft facility, then you wouldn’t have to pay for the additional interest. You could have withdrawn money exactly when you needed it.

3) Employment Criteria

 

Credit Score

You have to be working full time to avail a Payday Loan. If you are working part-time or are self-employed, then you may not be eligible for it. However, you can apply for Personal Overdraft irrespective of the nature of your employment.

4) Flexibility

If you are looking for flexibility in a Payday Loan, then you will be disappointed. When you get a Payday Loan, you have to pay it within a short term, along with fixed fees and interest. If you delay the payment by even a day, the lender slaps a fee. Needless to say, you are pretty much on the edge in this kind of arrangement.

If a Payday Loan is like a stiff landlord who is always breathing down your neck, waiting for the rent, then Personal Overdraft is like your best friend. Just like your friend gives you money and forgets about it, Personal Overdraft never puts pressure on you for repayment. You can pay back as per your convenience, in partial payments too, if you like.

5) Quick Access, and Faster Disbursal

 

 Cash Disbursal

When almost everything is available on the Internet, why should you go to a financial institution to get a loan? Well, you don’t have to if you have Personal Overdraft facility. In fact, you don’t even have to leave your house. All you need to have is a computer or a phone with Internet access. LoanTap offers Personal Overdraft facility that you can apply for, from anywhere. All you have to do is provide some basic details online, and a representative will visit you for the verification of some documents. Once all this is done and taken care of, the funds are released within 24 hours. It doesn’t get any easier than this.

What are Some Situations Where Personal Overdraft is Useful?

Even if you don’t have an immediate need for Personal Overdraft facility, there in no harm in availing the same. It can be incredibly useful at times when you least expect a crisis. Here are some situations where Personal Overdraft can be a life saver:

  • Emergencies: In an emergency, when you need a lot of cash, you can’t depend on a bank for a loan. With Personal Overdraft you can withdraw money anytime you want and handle an emergency without any problem.
  • Cash Bouncing: With overdraft facility, the cheques signed by you won’t bounce even when the funds are insufficient. This will help in preventing your CIBIL score from damage.

How Can I Apply for Personal Overdraft Facility?

To apply for Personal Overdraft facility you need to provide some basic information such as years of employment, EMI outflow, rent overflow, etc., and upload certain documents online. This also gives you an estimate of your loan eligibility. If you are eligible for Personal Overdraft, then you can set a time for an appointment with a LoanTap’s representative. During the visit, you have to provide signed documents for verification. Once it is completed, the facility is activated within 24 hours.

Technology has changed our world in many ways. The Internet, especially, has changed the way we shop, study, learn, and even indulge in entertainment. Banking too has adapted and improved accordingly. Today, you can apply for loans from the comfort of your home, and Personal Overdraft is one such online facility that can be of great use to you. No one can predict when they might need high amounts of money in a short period, but if you have Personal Overdraft facility, then you’ll never have to worry about that.

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Satyam Kumar is banking industry veteran with enriched experience of more than 20 years. Apart from founding LoanTap and FinTech Association of Consumer Empowerment, he is an avid traveler and holds keen interest in Blogging. He has amassed profound knowledge in FinTech trends, banking, consumer trends, food and mythology which he loves sharing with others.
Satyam kumarSatyam KumarCEO & Co-Founder, LoanTap asset 8 asset 9
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