Overdraft Personal Loan – Interest rates, Benefits and Documents

Personal loan offers are a great financial instrument for those who are looking for an instant credit boost. Similarly, the personal loan overdraft instrument is for those who are already personal loan customers. In the case of personal loan overdraft, the lenders decide everything – the credit amount to lend, the interest rates and more.

Personal loan overdraft is an added advantage for the users who frequently experience cash flow problems. Let us take a deeper dive into overdraft personal loans so that you can understand this facility better. 

What are the interest rates on personal loan overdrafts?

To make things simpler, personal loan overdrafts are only for those users who are already using a personal loan and are repaying that loan in EMIs. Therefore, a personal loan overdraft is only offered by banks or credit-ending institutions when they are sure that the applicants will be able to pay back what they owe.

The personal loan overdraft interest rate depends from one person to another, their credit score, their relationship with the bank and many other factors. Moreover, the interest is not charged on the complete amount, but only on the money that they have used.

Read more: How to get personal loans for self-employed in India?

How to apply for a personal loan overdraft?

Thankfully, there are multiple ways which you can use to apply for a personal loan overdraft. Also, do remember that the personal loan overdraft features and formalities can also differ based on the banks. Regardless, here are the steps by which you can apply for a personal loan overdraft:

• Log in to your online banking website (from which you have taken a loan) via your PC or phone
• Go to the offers tab
• Check for the personal loan overdraft facility
• Click on ‘Apply Now’ to proceed

Similarly, you can also visit your nearest bank branch and ask them to give you all the details on the personal loan overdraft facility.

Read more: How to take personal loans for students in India?

What are the eligibility criteria for personal loan overdrafts?

Here are the eligibility criteria that you must meet in order to be eligible for personal loan overdrafts:

• The applicant must be between 21 and 65 years of age
• You need to already have an account within the same bank
• The income criteria depend on the banks or the financial institutions
• A good credit score or good CIBIL score is always helpful when applying for a personal loan overdraft
• The business existence can also vary from one bank to another

What is the credit limit for personal loan overdrafts?

Customers who have accessed the personal loan overdraft facility can only access the credit that is made available to them. This credit limit is not fixed for every user. It depends from person to person and depends on these factors – monthly income, credit profile, cash flow statements, etc.

Read more: What is the minimum salary required to get a personal loan? 

What are the features of a personal loan overdraft facility?

Here are the features of a personal loan overdraft:

• Users will need to maintain a bank account at the bank from where they are applying for a personal loan overdraft facility
• There are many private-sector banks that provide this facility, for both salary account holders and savings account holders
• The credit via personal loan overdraft is usually sanctioned on the basis of credit score, repayment ability and other factors
• It is a short-term loan and needs to be paid back to the lending bank within the stipulated time, as informed while disbursing the credit
• The repayment tenure of the personal loan overdraft and the account – both are decided only by the banks
• According to current RBI regulations, the current accounts and cash credit accounts are eligible for ₹50,000 per week (maximum limit)

Read more: How to apply for a loan without an income proof?

What are the documents needed for a personal loan overdraft?

Here are the list of documents needed for a personal loan overdraft:

• The complete application form with all the details filled and attached with two passport-sized photos
• ID proof of the applicant – passport, voter ID, driving license, PAN card, Aadhaar card, etc.
• Address proof of the applicant – utility bills, passport, driving license, Aadhaar card, etc.
• Proof of age (school certificate or passport)
• Bank statement from the last 12 months
• Any additional documents as needed by the lender to sanction your personal loan overdraft

We hope this answers all your queries about the personal loan overdraft facility. Additionally, if you are looking for a personal loan, then apply for your loan today from the Airtel Thanks app.