A Personal Overdraft allows you to withdraw funds and repay funds at your convenience. You have to pay interest on only the amount which is overdue. Hence you can repay part of the outstanding amount whenever you have some money and withdraw some money whenever you have a need.
Pay Interest on only what you use
Personal Overdrafts tend to have similar interest rates as Personal Loan and have a number of benefits over Personal Loan.
Faster Funds Release and Simplicity
To get a Personal Loan you have to deal with a lot of paperwork. Not to mention, you also need a decent CIBIL score to stand a chance of loan approval. Overdraft, on the other hand, is not only a simpler option, but it is also faster.
Once you have done the initial set up of your Overdraft you can withdraw money with a couple of hours and definitely within one business day. If you take a Personal Loan everytime you need funds you are going to go through the same procedure everytime and will only get hands on the money in 3-5 days.
Personal Loans don’t leave much room for flexibility. You have to pay a fixed EMI for the duration of the tenure and the payments also have to be timely. For many people, this could be a problem, especially for individuals who have a larger proportion of Variable Pay. One month they could be cashing one cheque after another, and the next month they might have to make do with the bare minimum. A Personal Loan is not ideal in such situations, but a Personal Overdraft can aptly solve the problem.
A Personal Overdraft allows you to take as much money as you need (as long as it is within the limits set for you) and pay back as per your own convenience. You can pay within days, weeks, or months- whatever suits you.
Once you have taken a Personal Loan, the interest starts to accumulate immediately, even if you are not using the money at all. Consider an example in which you got a Personal Loan for higher education. However, as fate would have it, you made other plans and now the money you have is of no use. Since it makes no sense to pay interest on a loan that you don’t need, you decide to prepay it. Now comes the painful part: to pay prepayment fees, which can be quite high. Had you chosen to Overdraft Loan, however, you wouldn’t have to pay it. Also, most banks want their borrowers to take their time repaying the loans since the longer the tenure, the more money they make on the interest. Needless to say prepaying so soon could also affect your CIBIL score. Again, with an overdraft, there is no such problem.
CIBIL Score Protection
If you frequently take or repay loans, then your CIBIL score is bound to change frequently. Events like cheque bounces can cause your score to drop, and if these are frequent, then you can also have a hard time obtaining loans or credit cards in the future. However, you can avoid this by choosing to overdraft. With this facility, you will have only one loan which you are regularly servicing. This will give a positive boost to your CIBIL Score.
Manage Only One Loan
If you take multiple Loans then you have to Manage the hassle of multiple institutions, multiple loans, multiple cheques, multiple repayments. This is not only taxing but leads to a high chance of default and cheque bounces. A Personal Overdraft allows you to have just One Large Loan, One Single Payment and a lot less effort and confusion.
Why Do I Need Overdraft Facility?
Who wouldn’t like to enjoy the privilege of obtaining money on the go when needed? A number of banks are offering overdraft facility, but if you want something even more convenient, then you can get the facility online. LoanTap is the first of its kind to offer over drafting facility to salaried employees of India. Here are some of the advantages of LoanTap’s overdraft facility –
Instant Cash Disbursal- Once you have applied for overdraft facility, LoanTap transfers the amount within 24 hours so that you don’t have to wait for long.
Flexibility- You are free to choose your own draw-out option and repayment structure. This means there is minimal pressure (unlike with the case of Personal Loans).
Better Finance Management- Knowing that you have the support of LoanTap for your urgent cash requirements you can manage your expenses better. When things go wrong you don’t have to live on a shoestring budget, for you know there is a solution.
Ok, I am Interested. How do I Get Started?
Using LoanTap’s Overdraft Loan is really simple. You can start off by filling out your information on the website and upload required documents. Then you can provide your preferred time for the representative visit, which is when you will have to provide a copy of certain documents that are signed by you. Once this is over your job is done, and you will receive the funds as soon as the documents are verified.
Knowing that you have an option to get instant cash whenever you need certainly provides some peace of mind. LoanTap offers a kind facility to all individuals who seek flexibility and minimum hassle. Once you have availed overdraft facility, you won’t want a Personal Loan ever again. Feel free to check out the FAQ section if you have any questions.