Overdraft

Overdraft

Overdraft facility is the form of short-term credit, meant for meeting the working capital requirement of the borrower.

Overdraft
5 %
Interest Rate
Overdraft
7.41 %
Base Rate
Overdraft
12.41 %
Total Interest Rate

Last Updated Date: May 16, 2022

Standard Chartered Bank Nepal Ltd

In 1987, when it was first formed as a joint venture, Standard Chartered Bank Nepal Limited became operational. The Standard Chartered Group's global network provides the bank with a rare opportunity to provide genuinely international banking services in Nepal. A wide range of banking products and services are provided by Standard Chartered Bank Nepal Limited to a wide range of customers, including individuals, local mid-market firms, multinationals, main public sector companies, government companies, airlines, hotels, as well as the DO segment comprising embassies, aid organizations, NGOs and INGOs. Corporate Social Responsibility is an important part of the vision of Standard Chartered to become the world's best foreign bank and is the core pillar of the Bank's principles. Standard Chartered Bank Nepal Limited focuses on children's initiatives, particularly in the fields of health and education, and supports non-governmental organizations engaged in community charitable activities.

Overdraft

REQUIRED DOCUMENTS

Documents required for Overdraft Loan

  1. Completed loan application form of the bank.
  2. Identification document like Citizenship, Passport of applicant and the guarantors
  3. 2 Passport sized Photo of applicant and the guarantors
  4. Documents certifying current salary (for employee)
  5. Certified Income Statement
  6. Firm registration certificate (if business income)
  7. PAN/VAT certificate (if business income)
  8. Paper of Agreements/contracts (for Fixed Income Groups)
  9. Copy of land ownership certificate, blue print of land, latest land revenue receipt
  10. Four boundaries certificate of the proposes collateral security
  11. Other related document as necessary


What Is Overdraft Loan ? 

Overdraft is a loan provided by a bank that allows a customer to pay for bills and other expenses when the account reaches zero. For a fee, the bank provides a loan to the client in the event of an unexpected charge or insufficient account balance. Typically these accounts will charge a one-time funds fee and interest on the outstanding balance .An overdraft is an extension of credit from a lending institution that is granted when an account reaches zero. The overdraft allows the account holder to continue withdrawing money even when the account has no funds in it or has insufficient funds to cover the amount of the withdrawal. Basically, an overdraft means that the bank allows customers to borrow a set amount of money. There is interest on the loan, and there is typically a fee per overdraft. An overdraft is like any other loan, the customer pays interest on the loan and, in the case of overdrafts, will typically have a one-time insufficient funds fee.

How does overdraft work?

Under overdraft protection, if a client’s checking account enters a negative balance, they will be able to access a predetermined loan provided by the bank, and are charged a fee. In many cases overdraft protection is used to prevent a check from bouncing, and the embarrassment that this may cause. Additionally, it may prevent a non-sufficient fund fee, but in many cases each will type of fee will charge roughly the same amount. While the  overdraft involve providing temporary emergency funds when an account unexpectedly has insufficient funds, it's important to weigh the costs. Overdraft protection often comes with a significant fee and interest .As with any loan, the borrower pays interest on the outstanding balance of an overdraft loan. Often, the interest on the loan is lower than the interest on credit cards, making the overdraft a better short-term option in an emergency. In many cases, there are additional fees for using overdraft protection that reduce the amount available to cover your checks, such as insufficient funds fees per check or withdrawal.

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