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It is an unsecured form of credit that is mainly used for covering short term cash requirements.

Unsecured Overdraft Facilities

In India, an unsecured overdraft facility refers to a financial arrangement provided by a bank or financial institution to its customers, allowing them to withdraw funds from their current account even if the account balance falls below zero.

"Unsecured" means that the overdraft is not backed by collateral; hence, it's based primarily on the customer's creditworthiness and relationship with the bank.

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Unsecured Overdraft Facilities-

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Following are the procedure steps:

1. Application:

The first step is to approach a bank or financial institution that offers overdraft facilities. This can be done by visiting a branch office, contacting a relationship manager, or applying online through the bank's website.

2. Documentation:

The applicant needs to submit certain documents as per the bank's requirements. These documents commonly include:

  • Identity proof (such as Aadhaar card, passport, or driving license)
  • Address proof (such as utility bills, rent agreement, or voter ID)
  • Income proof (such as salary slips, income tax returns, or business financial statements for self-employed individuals)
  • Bank statements (to demonstrate existing banking relationship and transaction history)

    • 3. Credit Assessment:

    The bank assesses the applicant's creditworthiness based on factors like income stability, credit history, existing debts, and repayment capacity. This assessment helps the bank determine the applicant's eligibility for the overdraft facility and the applicable interest rate.

    4. Approval:

    If the applicant meets the bank's eligibility criteria and credit assessment standards, the bank approves the overdraft facility.

The bank also determines the maximum overdraft limit based on the applicant's financial profile.

5. Documentation and Agreement:

Once approved, the bank provides the applicant with a set of documents detailing the terms and conditions of the overdraft facility. The applicant is required to sign these documents, agreeing to the terms specified by the bank.

6. Activation:

After the documentation is complete and signed, the overdraft facility is activated. The applicant can then access the funds as per the agreed-upon terms.

7. Usage:

The applicant can use the overdraft facility by making withdrawals from their current account, even if the account balance falls below zero. However, withdrawals are limited to the approved overdraft limit.

8. Repayment:

The applicant is required to repay the overdrawn amount within the specified period, as agreed upon with the bank. Repayment terms typically include interest charges on the overdrawn amount.

9. Review and Renewal:

The bank may periodically review the applicant's financial situation and creditworthiness. Depending on the bank's policies, the overdraft facility may need to be renewed after a certain period, subject to the applicant's continued eligibility and credit assessment.

Why choose Livanity for Unsecured Overdraft Facilities?

Livanity is a one-stop solution for all your financial needs. Here, we try to provide you best services that are hassle-free and quick in nature. For Unsecured Overdraft Facilities, we provide you a comparative analysis of what different banks are offering. We also assist you in your final decision.

Here are a few reasons for you to apply for a Unsecured Overdraft Facilities at Livanity:

Fast assistance:

At Livanity, you can contact us at any official working hours of the day.

Customer needs in forefront:

Your needs are our priority. We promise to deliver you with services that are best on our capabilities. By handpicking Unsecured Overdraft Facilities offers based on customer profile, we try to give you the most personalized experience.

Compare Offers Online:

With more than 100 lenders as partners, you can compare the different offers of financial institutions to make the right decision. In fact, we help you find the best lender as per your eligibility requirements. There is a personalized relationship lender for every customer who helps him/her select the bank of his/her choice.

Real-time customer support:

Our customer support team is fast and efficient to clear all your doubts regarding loan eligibility, procedures, offers, documentation and repayment options. We even contact with the respective lender on behalf of you.

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