While scheduling monthly calendar, you suddenly realize that plan to celebrate the favorite festival with schoolmates, and girl friend’s birthday falls within first twenty days on the month. To add-on, your restlessness, gentle reminder SMS to pay monthly EMI for the bike, drops in. You are still to pay the balance payment of air ticket to an agent.
At the back of the mind, you apprehend that salary advance request will get rejected, as you’ll be on leave. Now What? A personal loan from a bank? Cancel the long-awaited celebration with schoolmates? Borrow money from parents? Well, the answer is a big-No! There is impressive, convenient, fast and sure shot benefit of short-term loan
Take the advantage of short-term loans which are best suited for professionals and emergency situations. In financial emergencies, for festival shopping, paying EMI, unexpected bill payments, get online loans offered by professionally managed Non-Banking Financial Companies (NBFC).
These NBFCs extend unsecured loans, generally small amounts for short terms, for less than twelve months. The benefit of these loans are-
– Fast Disbursement: Short-term loan approvals are as fast, no paper documentation, and are online.
– Low amount approval: Your small financial crunches can be addressed with easy loans. You are not forced to borrow large amounts against your needs.
– Easy repayment options: You yourself decide the date of repayment, unlike fixed dates of repayments in other loaning or credit systems.
– CIBIL or Credit Score: You do not have to always score well on your CIBIL or have a pre-history of financial transactions or credit score.
Why Short Term Loans?
Short-term loans are the best recourse in emergencies.
You Prefer Using Cards?…Check-Out!
What if, in case you do not have a credit card? If you have exhausted your credit card’s limits you need some other alternative. Likewise, a credit card will not be accepted everywhere like- your landlord might not accept it to receive the rent. Or, for that matter, when you wish to pay back your credit card bill you cannot use it. Also, a cash advance can only be availed from an ATM using your credit card which depends on your fixed limit.
Do Personal loans suit you?
Personal loans need a lot of documentation and take days and weeks for approval and disbursement. They cannot be an option for emergency needs. They check your previous financial transaction or take into consideration Credit Scores.
All such hassles are not applicable in short-term loans and at the same time your privacy is retained. You can repay the moment you receive your salary, the very next month.
Choose the Best
The best way to zero down on a Non-Banking Financial Company which can offer a superior easy loan
product is the convenience, speed of disbursement and the flexibility they offer to customers. One such company offering short-term loans with all these features and much more are EarlySalary.com, a leading Fintech company using advanced technology of “Social Score”, to approve loan amount. Unlike the traditional methods of checking historic financial transactions or Credit Scores, they employ an advanced Social Scoring system defined by the customer’s presence in the digital ecosystem or social community.
Loan on Mobile App
What makes small loans offered by EarlySalary.com pre-eminent are its distinct features. Unlike no credit check loans where you visit a bank or call a loaning agent; it’s all there on a “Mobile App”. You just have to download the mobile application on your Smartphone from “Google play store” and get started.
Zero Documentation and Credit Score
Neither paper document nor credit score is required for short-term loans. Simply click your selfie, and use the “upload documents” option in the app. This is the most convenient and fast way to receive online loans. The unbelievable speed of approval can astound you, as it is as less as just 30minutes.
Contain One’s Self-Respect
With Fibe.in your privacy is maintained, as you need not disclose it to anyone. You do not experience embarrassment and tide over the situation.
Step-by-Step Easy Loan
Simplified steps, to apply for short-term loans, on the instant loan app of the company make them popular. The steps are user-friendly and easy to maneuver. Similarly, the approvals and disbursals are simple and fast. Register using your Facebook account and upload few basic documents. After entering the amount, choice of repayment you get instant approval within 30 minutes, based on social scores. You sign some documents, delivered at the doorstep, and cash is transferred to your account immediately.
It’s a definite win-win for professionals like you, who are connected to the social media community. The bigger the network the strong “social scorecard” and in turn better chances of high values and faster approvals.
In September 2010, India set out on an arduous journey. A journey to provide every one of its billion plus residents with a unique identification number. A journey that would prove to be the beginning of a FinTech revolution for the country.
INDIA STACK
What is India Stack?
In simple terms, India Stack is:
A paperless and cashless service delivery system.
The India Stack is a set of APIs that allow governments and private companies to deploy cashless and paperless technology products.
The stack is a new technology paradigm that is scalable to handle massive data inflows, and is poised to enable entrepreneurs, citizens and governments to interact with each other transparently.
It is an open system to electronically verify businesses, people and services.
It gives the data to the concerned individual and lets him decide who he can share the data with. The smartphone will be the delivery platform for services such as digital payments, identification and digital lockers.
It is the largest application programming interface (API) on the planet.
Poised to change the lives of 1.1 billion Indians.
On December 1st 2016, in a much-awaited press conference, Mukesh Ambani, CMD of Reliance Industries, announced that Reliance Jio had crossed 50 million subscribers – a feat it had achieved in a mere 83 days. This made Jio the world’s fastest growing tech company surpassing the likes of Facebook, WhatsApp, and Skype. This astonishing achievement was made possible by the strategy of rolling out e-KYC across all outlets in India, allowing SIM activation in under 5 minutes. 95% of activations were done using e-KYC resulting at a staggering average rate of addition of 6 Lakh subscribers per day.
It gives data to the concerned individual and lets him decide whom he can share data with. The smartphone will be the delivery platforms for services such as DIGITAL PAYMENTS,IDENTIFICATION AND LOCKERS.
Here are the 5 tenets of India Stack and the Startups leveraging it
Paperless identification
Aadhaar’s 12-digit unique identification number, floated by the UIDAI in 2009, has more than one billion Indians registered who have became the basis for the India Stack.
This system of identification and delivery of services is already being used by the startup world.
Aadhaar to deliver banking services to citizens.
Paperless payments
mobile payments through the smartphone. This can become India Stack’s signature delivery mechanism to make India a digital cash economy.
Also, Nowdays the short term online loan is being provided by the companies in just a click without paper work through your smartphones
Digital payments platform Paytm has announced partnership with major NHAI toll concessionaries like Reliance Infra, Sadhbav, IRB, MEP, L&T and GMR to enable cashless payments at all state, national and city toll plazas.
Paperless documents
Although digitisation is growing, India consumes the largest amount of paper.
the per-capita consumption of paper is 9kg and is all set to double by 2020 because of the growth of the education industry.
But with smartphone prices dropping, at least financial services and the healthcare industry can move to a paperless scenario in major cities with the help of India Stack.
The Stack’s APIs allow startups to bring solutions that can make documents go digital. Like for example taking online loans can help in saving the all paper documentation and verifications.
E-KYC
Abbreviated as electronic Know Your Customer
A key challenge for the customers while opening bank accounts is providing address proof, identity proof and physical copies of documents.
E-KYC simplifies the customer experience for the Aadhaar-registered individuals to open bank accounts.
Digital signature
This would be the last mile to cross, and can be made simple between two or more parties executing contracts over the mobile.
Today, most HR offers are online documents that contain digital signatures.
How it affects India?
Citizens
Brings millions of Indians into the formal economy by reducing friction.
Software ecosystem
Fosters innovation to build products for financial Inclusion, healthcare & educational services at scale.
Government
Brings a paradigm shift in the way government services are delivered in a transparent, accountable and leakage free model
How Fibe uses India Stack for enabling E-KYC & Faster loan disbursement.
Fibe provides short term cash to salaried individuals without any paperwork or documentation, thus following the digitized route.
The transfer of money into an individual’s bank account is a seamless process without any physical layer involved.
The paperless process not only helps in management of time and resources but also avoids redundancy.
Because of digitization, the process becomes smoother, as opposed to the traditional banking systems that turn out to be cumbersome and time-taking.
With the evolution in the field of information technology, the lifestyle of people started changing gradually. It started showing its effect on various sectors and one of them is banking and finance sector. Before the evolution, the process of completing a financial transaction was tough and physical presence of both person (borrower and lender) was must. But nowadays everything has changed even the way of money is being borrowed has changed by online lending platforms. One can easily borrow a sum of loan/money from the lender without knowing each other or meeting each other. The transactions are carried out in short time period with the help of information technology.
How it all started?
Lending has existed for thousands of years and has taken on many different forms throughout. At the very end of the 20th Century, First Internet Bank emerged. Consumers could apply for an online loan from their home or office computer, and they didn’t actually have to visit a bank or speak with a loan official.
The number of start-ups in the online consumer lending space has grown significantly from a mere 2 in 2013 to 30 in 2015. These firms either operate as NBFCs, intermediaries for banks/NBFCs or serve as a P2P lending marketplace. People conduct all kinds of business transactions online that they used to perform in person. This includes shopping, paying bills, researching business decisions, and of course, applying for loans. As both consumers and business owners grow more comfortable with conducting business over the internet, online lending is also expected to continue to grow.
Today, online money lending is in full swing and only getting bigger day by day with lakhs for transactions and crores of the loan being distributed per month.
How one may lend money online?
The process of lending short term loan online is quite easy. It is divided into the 4 simple steps as shown
For instant loan the borrower needs to apply online, once the lender receives an application they will check for eligibility and approves/dis-approves the application. Once the application is approved the disbursement of the loan takes place.
These online platforms work more like a bank. When a person applies for a personal loan online there is evaluation of creditworthiness and repayment capacity of an individual. The only difference between banks and the online lending platforms is that there will be no executive visiting to collect the documents and provide other services A borrower needs to scan and upload documents for KYC, such as photo, PAN card, Aadhar card and passport. Then, they need to provide income-related documents such as six months’ bank statement, three months salary slip and income tax returns.
We are one of them
We all have gone through the situations where we are left with empty pockets and being broke at the end of the month is a common problem.
We at Fibe.in offer quick short term loans to salaried individuals. We plan to help provide a small bridge loan to tide over that short difficult period till your salary reaches your account. The process of applying for a loan on EarlySalary is very simple. It is consisting of three easy steps. The first step is that one needs to log in and apply for the loan after which loan request will be approved or rejected (depends upon credit worthiness) and at last as soon as the request is approved the cash will be transferred into your account immediately.
Sounds good? Let’s try it out here and get your salary in advance with Fibe.
Getting your salary is a wonderful feeling. It makes you feel rewarded for all the hours of dedicated work that you put in. But the happiness fades away when a large chunk of your hard-earned income gets converted into tax. It is essential to figure out how you can avoid that high deduction in tax.
Income
The components that make up your salary include your Gross Salary, Provident Fund, Insurance, Leave pay, Gratuity Employee State insurance and Labour Welfare Fund
This income that is received by an employee is taxed under “Income from Salaries”.
You need to find out the slab that your salary will pertain to. After figuring that out you need to be prompt in declaring your investments. This allows the employer to take into consideration the portion of your earnings that you have invested and they will accordingly deduct tax from your salary.
Declaration helps you to avoid the cumbersome process of filing for refunds from the Income Tax department.
Tax Calculation
Taxes are calculated on the annual income of a person, and an annual cycle (year) in the eyes of the Income Tax law starts on the 1st of April and ends on the 31st of March of the next calendar year. The law recognises and classifies the year as “Previous Year” and “Assessment Year”.
Income Tax Slab Rates
Income tax slab rates are for different categories of taxpayers who are taxed progressively higher based on their earnings.
In all the tables listed below, Education Cess of 2% and SHEC of 1% will be levied on the tax computed using the rates given below.
Under Section 87(A), an Income Tax Rebate of ₹b2,000 is provided for all individuals earning an income that’s less than ₹ 5 lacs per annum.
Income Tax Slabs for male individuals below the age of 60 and HUF:
Income Tax Slabs
Income Tax Rates
Total income less than ₹ 2 lacs 50 thousand.
-NIL-
Total income greater than ₹ 2 lacs 50 thousand but less than ₹ 5 lacs.
5% of the amount by which it exceeds ₹ 2 lacs 50 thousand.
Total income greater than ₹ 5 lacs but less than ₹ 10 lacs.
20% of the amount by which it exceeds ₹ 5 lacs.
Total income greater than ₹ 10 lacs.
30% of the amount by which it exceeds ₹ 10 lacs.
Income Tax Slabs for female individuals below the age of 60:
Income Tax Slabs
Income Tax Rates
Total income less than ₹ 2 lacs 50 thousand.
-NIL-
Total income greater than ₹ 2 lacs 50 thousand but less than ₹ 5 lacs.
5% of the amount by which it exceeds ₹ 2 lacs 50 thousand.
Total income greater than ₹ 5 lacs but less than ₹ 10 lacs.
20% of the amount by which it exceeds ₹ 5 lacs.
Total income greater than ₹ 10 lacs.
30% of the amount by which it exceeds ₹ 10 lacs.
Income Tax Slabs for all individuals above the age of 60 – Senior Citizens:
Income Tax Slabs
Income Tax Rates
Total income less than ₹ 3 lacs.
-NIL-
Total income greater than ₹ 3 lacs but less than ₹ 5 lacs.
10% of the amount by which it exceeds ₹ 3 lacs.
Total income greater than ₹ 5 lacs but less than ₹ 10 lacs.
20% of the amount by which it exceeds ₹ 5 lacs.
Total income greater than Rs.10,00,000.
30% of the amount by which it exceeds ₹ 10 lacs.
Income Tax Slabs for all individuals above the age of 80 – Super Senior Citizens:
Income Tax Slabs
Income Tax Rates
Total income less than ₹ 5 lacs.
-NIL-
Total income greater than ₹ 5 lacs but less than ₹ 10 lacs.
20% of the amount by which it exceeds ₹ 5 lacs.
Total income greater than ₹ 10 lacs.
30% of the amount by which it exceeds ₹ 10 lacs.
Deductions: There are various sections under which you can invest your salary and reduce the taxable amount.
Deductions for your taxable amount are available under various sections of the Income Tax act 1961. They are as follows: –
1. Public Provident Fund (PPF):
By contributing to your PPF account, you can get a tax deduction under Section 80C, the Indian Income Tax Act, 1961.
2. Life Insurance Premiums:
You can get an income tax deduction for paying premiums towards life insurance policies for self, spouse and child under section 80C of the Indian Income Tax Act, 1961. The amount received on maturity of the policy is free from tax. However, it is subject to the terms and conditions mentioned in your policy.
3. National Saving Certificate (NSC):
The amount invested in NSC is eligible for tax deduction under section 80C of the Indian Income Tax Act, 1961. National Saving Certificates are one of the highly secured modes of investment in India. But, the interest earned from NSC is taxable. As an NSC is a cumulative scheme, interest is reinvested and qualifies for a tax deduction.
4. Bank Fixed Deposits (FDs):
You can get a tax deduction by investing in fixed deposits for a tenure of 5 years under section 80C of the Indian Income Tax Act, 1961. Many banks in India offer tax-saving fixed deposits. However, the interest accrued on FDs is subject to tax
5. Senior Citizen Savings Scheme (SCSS):
Senior citizens can get a tax deduction by investing in the Senior Citizen Savings Scheme offered by banks. These schemes are eligible for tax deduction under Section 80C of the same act. The interest earned from these schemes is entirely taxable.
6. Post Office Time Deposit (POTD):
Investing in a five-year POTD, you can get a tax deduction under Section 80C. However, interest accrued on the same is fully taxable.
7. Unit-linked Insurance Plans (ULIP):
Investing in ULIPs for yourself, your spouse and your children, you can get tax deductions under Section 80C.
8. Home Loan EMIs:
Equated monthly instalments paid to repay the principal amount of your home loan are eligible for income tax deductions under section 80C of the same act.
Investing in mutual funds and equity-linked savings schemes, you are eligible for tax deductions under section 80C, the Indian Income Tax Act, 1961.
10. Stamp Duty and Registration Charges for a Home:
Stamp duty and registration fee paid for transferring property are entitled to income tax deduction under section 80C, the Indian Income Tax Act, 1961.
11. Retirement Savings Plan:
You can also get income tax deductions by investing in retirement plans offered by LIC or other insurance providers. Contribution to the National Pension Scheme is also eligible for a tax deduction.
12. Tuition Fees:
The tuition fee paid for your children’s education qualifies for income tax deduction under section 80C. However the fee needs to be paid for full-time education in an Indian university, college and school for any two children. The tuition fee does not include any donations or development fees for education institutions.
13. Medical Insurance Premiums:
A health insurance premium paid for self, spouse and children qualifies for income tax deduction under section 80D of the Indian Income Tax Act, 1961. The deduction allowed under this section is ₹ 25,000 for youngsters and ₹ 30,000 for senior citizens.
14. Infrastructure Bonds:
Investing in infrastructure bonds, you become eligible for income tax deductions under section 80CCF of the Indian Income Tax Act.
15. Charitable Contribution:
Donating to charitable tasks will help you reduce your taxable income under section 80G of the Indian Income Tax Act, 1961. However, make sure that you declare the whole contribution before 31st December each year.
16. Treatment of Disabled Dependents:
Under section 80DD of the Indian Income Tax Act, 1961, you can get income tax deductions for medical expense incurred in the treatment of any disabled dependent of yours.
17. Deduction for Preventive Health Check-ups:
An amount of ₹5,000 spent for preventive health check-ups of an individual or their family members qualifies for tax deduction under section 80D of the Indian Income Tax Act, 1961.
18. Interest Paid on Education Loan:
You can get a tax deduction on the interest paid for an educational loan under section 80E of the Indian Income Tax Act, 1961. The loan can be taken to pursue higher education by the employee or for their spouse, children or a student to whom the employee is a legal guardian.
19. Deduction on House Rent Paid:
An employee can get an income tax deduction for the house rent paid if the employee or their spouse does not own residential accommodation at the place of employment. This deduction is usually applicable for salaried taxpayers under section 80GG of the Indian Income Tax Act, 1961.
Income Tax E-Filing:
Once the tax is deducted, any tax refund is facilitated only when you submit your income tax return for that year. So any TDS on rent payments for NRIs or TDS deduction by banks on your fixed deposits will be refunded only once you file your tax returns and claim the desired tax deduction. You will need to file for tax refunds online once you file your ITR for that year.
You can e-file your Income Tax Return, TDS return, AIR return and Wealth Tax Return online, e-filing your return has obvious advantages like the fact that you won’t have to deal with the hassle of paperwork and waste time sorting through it all. You can simply log on to the secure website and e-file your return.
Hope this article gives you a clear picture of how taxes are deducted from your salary and how you can take measures to reduce your taxable income.
An overdraft facility allows you to withdraw money from your bank account even when your balance is low or zero, up to a pre-approved limit. In simple words, it works like a short-term credit line linked to your savings or current account. You pay interest only on the amount you use, not on the full sanctioned limit.
Let’s say your account has ₹3,000, but you need ₹15,000 urgently for a hospital bill. If your bank has approved an overdraft limit of ₹50,000, you can withdraw the extra ₹12,000 and repay it later as per the lender’s terms.
For answers to queries like ‘what is an OD loan?’ and ‘how OD account works?’, read on.
What is an Overdraft Facility?
An overdraft facility, also called an OD facility, is a credit arrangement offered by banks or financial institutions. It lets you withdraw extra funds from your linked bank account within a sanctioned OD limit.
This limit is usually decided based on factors such as:
Your income and repayment capacity
Account balance and banking history
Credit score and credit behaviour
Relationship with the lender
Type and value of collateral, if any
Nature of employment or business stability
Some overdraft facilities are unsecured, while others may be secured against assets such as fixed deposits, insurance policies, shares, bonds or property. The interest rate also depends on the lender’s policy, your profile and whether the OD is secured or unsecured.
Real-life scenario:
A salaried employee may get an overdraft limit based on monthly salary credits, while a business owner may get it based on current account transactions, business cash flow and collateral value.
Types of Overdraft Facility
Pre-arranged Overdraft Facility
A pre-arranged overdraft facility is approved by the bank in advance. The bank reviews your financial profile and gives you a fixed overdraft limit. Once activated, you can use the facility whenever needed, up to the approved limit.
Let’s say:
You run a small business and your supplier payment is due on the 5th, but your customer payment usually comes on the 10th. A pre-arranged OD can help you pay the supplier on time and repay the used amount once the customer payment arrives.
Instant Overdraft Facility
An instant overdraft facility is usually offered digitally and may be approved quickly based on your account activity, credit history or existing relationship with the lender. In some cases, it can be offered when you try to make a transaction but do not have enough balance.
Example:
You are making an online payment of ₹8,000, but your account balance is only ₹5,000. If you are eligible, the bank may allow you to use an instant OD facility for the shortfall, subject to approval and charges.
Features of an Overdraft Facility
Here are the key features of an overdraft facility:
Feature
What it Means
Linked to account
The facility is connected to your savings or current account
Pre-approved limit
You can withdraw funds up to a sanctioned OD limit
Interest on usage
Interest is charged only on the amount used
Flexible repayment
You can repay as per your cash flow, subject to lender terms
Revolving credit
Once you repay the used amount, your available limit gets restored
No fresh paperwork each time
After activation, you can use the OD without applying again
Short-term support
It is best suited for temporary fund gaps, not long-term borrowing
Example:
If your approved OD limit is ₹1 lakh and you use only ₹25,000, interest will be charged only on ₹25,000. After you repay ₹25,000 along with applicable interest, your full limit becomes available again.
A simple rule to follow is: ‘Use an overdraft as a bridge, not as a regular income source.’
When Do You Need an Overdraft Facility?
An overdraft facility can be useful when you need quick access to funds for a short period. It may help in situations such as:
Managing sudden expenses like medical bills or urgent repairs
Covering delayed salary, rent or business payments
Meeting short-term cash flow gaps without taking a new loan
Real-life scenario:
Suppose your salary is usually credited on the 1st, but this month it is delayed by a few days. Your rent and electricity bill are due immediately. In such a case, an overdraft facility can help you make payments on time and repay once your salary is credited.
Business scenario:
A shop owner may need to stock inventory before the festive season, but customer sales will happen later. An OD can help manage this short-term gap without applying for a fresh business loan.
How OD Account Works
An OD account works by allowing you to withdraw funds beyond your available balance, up to the approved overdraft limit. The bank charges interest on the overdrawn amount for the number of days it remains unpaid.
Let’s say:
Your bank account balance is ₹10,000 and your approved OD limit is ₹40,000. You need ₹30,000 for an urgent expense. You can withdraw ₹30,000, out of which ₹20,000 will be treated as the overdraft amount. Interest will be charged only on ₹20,000, not on the full ₹40,000 limit.
When money is deposited into your account, the overdrawn amount may get adjusted. Once repaid, your OD limit becomes available again.
Another example:
If you use ₹20,000 from your OD limit for 10 days and repay it on the 11th day, interest is usually calculated only for the days you used that amount.
If the overdraft is not repaid within the agreed period, the lender may charge penalties, reduce or cancel your OD limit, report delayed repayment to credit bureaus or take recovery action as per the terms.
Overdraft Loan Eligibility Criteria
Eligibility may differ from one lender to another, but most banks and financial institutions check the following:
Age as per lender policy
Stable income or business cash flow
Good credit score and repayment history
Active savings or current account
Healthy average bank balance
Existing relationship with the lender
Employment or business stability
Collateral value, in case of secured OD
Example:
A salaried applicant with regular salary credits, a good credit score and a stable job may have a better chance of getting an OD facility. A self-employed person may need to show regular business income, bank statements and tax records.
Documents Required for Overdraft Facility
The documents required depend on whether the OD is secured or unsecured. Common documents include:
Document Type
Examples
Identity proof
PAN card, Aadhaar card, passport or voter ID
Address proof
Aadhaar card, utility bill, passport or rental agreement
Income proof
Salary slips, ITR, Form 16 or profit and loss statement
Bank proof
Recent bank statements
Business proof
GST registration, business registration or partnership deed
Collateral documents
FD receipt, insurance policy, property papers or demat details, if applicable
Real-life scenario:
If you apply for an OD against a fixed deposit, the lender may ask for your FD details along with KYC documents. If you apply as a business owner, you may need to submit bank statements, GST details and income records.
How to Apply for an Overdraft Facility Online: Step-by-Step
You can apply for an overdraft facility online through your bank or financial institution’s website or app. Here’s a simple process:
Check eligibility
Review the lender’s criteria for income, credit score, account type and banking history.
Log in to the website or app
Visit the lender’s online portal and look for the overdraft or OD facility section.
Choose the OD type
Select whether you want an overdraft against salary, current account, FD, property, securities or another asset.
Fill in the application form
Add your personal, income, employment and bank account details.
Upload documents
Submit identity proof, address proof, bank statements and income documents.
Wait for verification
The lender will review your profile, credit history and documents.
Get limit approval
If approved, the lender will sanction an OD limit and share interest rate, fees and repayment terms.
Activate and use
After accepting the terms, the OD limit becomes available for use.
Example:
Suppose you already have an FD with your bank. You may log in to the mobile banking app, select ‘Overdraft against FD’, enter the required details, accept the terms and get an OD limit based on your FD value.
Benefits of an Overdraft Facility
An overdraft facility offers many benefits when used responsibly:
Quick access to funds: Useful during emergencies or temporary cash shortages
Interest only on used amount: You do not pay interest on the full limit
Flexible usage: Funds can be used for personal or business needs
No fixed EMI structure: Repayment can be more flexible than a standard loan
Revolving credit: Repaid amount becomes available again
Helpful for cash flow: Especially useful for businesses with delayed payments
Let’s say:
You have an approved OD limit of ₹75,000 but use only ₹15,000 to pay a vendor. You repay the amount after 7 days when your customer clears their invoice. In this case, you pay interest only on ₹15,000 for the usage period.
However, it should be used carefully. Frequent overdraft usage may signal poor cash management and can increase your borrowing cost.
The Overdraft Limit
The overdraft limit is the maximum amount you can withdraw over and above your account balance. It is not the same for every customer.
Banks may decide your OD limit based on:
Monthly income
Credit score
Account usage
Average balance
Repayment behaviour
Value of collateral
Type of account
Example:
A salaried customer earning ₹60,000 per month may get a smaller OD limit based on salary credits. A business owner with strong monthly transactions and collateral may get a higher OD limit.
The lender may also increase, reduce or withdraw the limit depending on your usage and repayment behaviour.
Overdraft Facility vs Personal Loan: Key Differences
Point
Overdraft Facility
Personal Loan
Nature
Credit line linked to account
Fixed loan amount
Interest
Charged only on used amount
Charged on full loan amount
Repayment
Flexible, as per terms
Fixed EMIs
Best for
Short-term cash gaps
Planned or larger expenses
Limit reuse
Repaid amount can be reused
Cannot be reused once repaid
Collateral
May or may not be required
Usually unsecured
Tenure
Short-term or renewable
Fixed tenure
Real-life example:
If you need ₹20,000 for 10 days due to a delayed payment, an overdraft may be more suitable. But if you need ₹2 lakhs for a wedding, home renovation or education expense and want fixed monthly EMIs, a personal loan may be a better fit.
An overdraft is useful for temporary fund needs. A personal loan is better when you need a fixed amount for a planned expense and want structured EMI repayment.
An overdraft facility allows you to withdraw more money than what is available in your bank account, up to a limit approved by the lender. Interest is charged only on the amount used.
2. Is overdraft good or bad?
An overdraft can be good if used for short-term needs and repaid on time. It can become costly if you use it regularly, exceed the limit or delay repayment.
3. What is an overdraft loan and how is it different from a regular overdraft?
An overdraft loan usually refers to a credit limit that works like a loan but offers flexible withdrawal and repayment. A regular overdraft is generally linked directly to your bank account and lets you overdraw up to an approved limit.
4. Who is eligible for an overdraft facility in India?
Individuals with stable income, good credit history, an active bank account and healthy repayment behaviour may be eligible. Businesses may need to show regular cash flow, bank statements and business proof.
5. How do I apply for an overdraft facility online?
You can apply through your bank’s website or mobile app. Check eligibility, fill in the application form, upload documents, complete verification and accept the approved OD terms.
6. What documents are needed for an overdraft facility?
Common documents include PAN card, Aadhaar card, address proof, income proof, bank statements and collateral documents, if the overdraft is secured.
It’s the time of the year when promises are made new beginnings are carved, and bonds are strengthened.
It is the Valentine’s week. This is the week where people express their love for each other. This is the time when people exchange gifts with each other to showcase their affection.
However often we find ourselves in a state where our finances dwindle, and we are not able to fulfill our desires.
It is sad to acknowledge the fact that the most romantic day is approaching and we are low on cash. This makes us feel helpless and stressed. We even go in a state where we do not see the point in celebrating the day.
But EarlySalary never wants the lovebirds to miss out on such a day. We would want people to enjoy the day to it’s fullest without having to worry about cash.
With Fibe’s instant cash option, you can avail money whenever you want.
We would want you to cherish this day and make the most of it.
And not just the day of Valentine, Fibe would even suggest you to be the Earlybird where you get something unique for your loved one in the week prior to Valentine’s day.
Presents are always overwhelming, but they are even more endearing when given to people at the time when they are least expecting it.
With EarlySalary’s cash option, you can make Valentine’s day special in various ways. We can suggest some to give you a slight idea!
You can take your better half on a dinner date and celebrate the occasion in the grandest of days.
You can plan a holiday for your loved one, and travel to explore and experience
Valentine’s day falling on a weekday should not deter you in celebrating elaborately. You can make the weekday better than the weekend and paint the town red! You can take her out to the grooviest club and dance the night away!
You can get them something unique that will cause them to smile like never before
You can fill their wardrobes with the latest clothing and accessories
You can plan a weekend getaway for them away from the hustle and bustle of city life
We strongly believe that you all have a creative head and you can implement this Valentine’s day in the most special way for your loved one. EarlySalary’s always there as a friend when you need it!
When you are in your twenty’s, you get perpetual recitations on money saving and management
This indeed is a great thing, because an advise like this is always treasure worthy.
However apart from managing finances and saving money, it is also crucial to master the art of spending right.
Let’s discuss about where you should be spending your money.
Health Insurance
Health is something that should be kept on top priority. You might not want to think about health when you are young, but health insurance is one of the things 20-somethings should spend their money on. While being a student you maybe covered under your parent’s health plan. However beyond that stage, you need to invest in order to be better prepared when an emergency strikes.
Medical bills are scary, especially when they get piled up. So it is imperative to sort out these finances in order to escape the last moment distraught.
From personal experience, one trip to the emergency room can cost thousands of dollars, which can easily deplete your savings account.
Even if you can’t afford the best coverage, some coverage is better than none.
Life Insurance
There are various life insurance policies to opt for in india.
Life insurance is relatively cheap if you’re a young adult with no major health problems.
If you’re single with no dependents, you may feel life insurance is unnecessary at this point in your life.
However, a policy can pay off your debts.
Plus, the death benefit can cover your funeral and burial, taking the financial burden off your family.
CIBIL Monitoring
You should monitor credit report once in a year. This helps in keeping a check on your credit scores.
Even if you do not have a credit history or a long credit history, it is imperative to stay on top of your report.
Erroneous credit has many implications on future loan requests and applications.
You can evaluate your credit once on CIBIL by paying Rs 550. Then there are different plans that you can take to monitor your account at regular intervals.
Building a retirement account
Retirement is a far-fetched idea. Thinking about retirement is one of your least priorities.
However money grows exponentially if you start investing at the right time. This would create a very comfortable and at ease retirement phase for you.
Investing in property
Most of you twenty-something’s would not think of buying a home. A rented space is what you need at this stage.
However with approaching stability and firm finances, thinking of investing in property is a great step indeed. This helps in safeguarding your future
You can build equity, and when you’re ready to sell your starter home, you can put the proceeds down on a nicer place..
Investing in reliable and cost-effective vehicles
It is a sensible decision when you choose to buy a vehicle that is both reliable and cost-effective.
You need to avoid buying new used cars, or stop dealing with numerous repairs that drain your pocket. A wiser decision is to purchase a newer model car that requires optimum maintenance. You can pay off the loan for the car gradually.
Money can be employed in various ways. But the best ways are something that you need to seek out. This helps in planning your present and future in a much better fashion.
Some situations demand the need for that extra cash. The hammer of Emergencies can strike us anytime, and can cause a financial imbalance.
The very situations can put us in an embarrassing spot where in we have to resort to sources for borrowing personal loans.
One such source is our work place. Salary advance is the solution that we think of falling back onto. However getting an advance from our employer is not often an easy task.
There are various factors that impede our decision to ask for money from employer. We will list down some below
1. Work Environment: The work culture, and organisational policies are influential in determining the granting of salary advance. Some organisations post their salary day guidelines on their website. Some do not. In such cases seeking permission from the HR head or your boss may seem like an unachievable task. Explaining the need is an even more cumbersome task. You would have to figure out the perfect time to visit your boss, so that your request is not over looked.
These situations might push your bosses to look deep into your private finance management, which is not a great thing.
2. Paperwork: Layers of paperwork deter our will to ask for a salary advance. We dread taking a loan, because we do not want to surmounted by innumerable documents.
While some smaller organisations might agree for a loan with a handshake, others might ask you to deep dive into piles of documentation.
The documented agreement could talk about a repayment date. This could be your next salary date or a pre-decided period within which you need to repay the loan.
The paperwork could also include a clause that permits your employer to debit the repayment amount from your future paycheck. Some employers may even charge a few bucks to cover the paperwork.
3. Official agreements are binding: Borrowing from your employer is very different from borrowing from family or friends. You cannot have the attitude of “ I will pay whenever I can”. There is a fixed date, and failure to repay might be consequential in a bad way.
4. Your image perception by others: – Before you borrow, you are also enveloped by thoughts like “ What If I am unable to repay? What will my colleagues think of me” “Am I putting my reputation at stake by borrowing ?” “Will I strain my relationship with my boss?” All of these thoughts pester you even if you are borrowing for the first time. Also if this is a lifestyle issue, then resorting to your employer is a big no-no.
5. Acceptability : The higher you go up the corporate ladder, the probability of you getting a loan will be lower.
Instead of going through the hassle of asking for a loan from your employer, use Fibe. Fibe is a one stop solution to all your cash worries. You do not have to think twice before asking us for money. Procedure for online application is very easy. The money transfer is an instant process, there is no paperwork and hesitation involved.
Fibe offers personal loans at a very low rate in the quickest possible way.
Fibe is a win-win solution for both the employees and the employers. The employers too would not have to bear any financial constraint. They would escape the paperwork involved.
Fibe renders a happy employee and employer situation.
The combination of Startups and Finance has lighted the thought bubble of Techies.
This has prodded them to move forward to build a space that blends both.
Basically Fintech organisations use technology to help users avail financial services effortlessly and on the go.
Fintech encompasses all technology-based companies operating in insurance, payment, loans, asset management etc.
Fintech is taking the technological space by a storm. With the introduction of these startups, the technical space the distance between technology and money has been bridged.
With the emerging industry of Fintech, there is an increased accessibility to the finance, along with an elevated awareness amongst the users of finance and technology. These firms offer instant, constant and efficient financial services to the users. They also serve as a competition to the conventional banks that exist.
The aim to integrate technology so that various systems in place interact has lead to the seamless processing of information and data transfer. This leads to better decision making processes(for cash, loans, credits etc) and also diminishes the cost.
With the emergence of multitudes of NBFC( Non-banking financial companies), Payment banks , mobile wallet companies etc have rendered a surge in the Fintech sector.
There are various verticals for Fintech
There are numerous startups that have ventured in the services of lending . These startups surpass the conventional financial institutions by offering alternative credit models, and also enhance the accessibility of users to money and money matters. Basically users can gain access to capital much faster and at a cheaper rates through these.
• Fintech has also entered Remittance. Remittance otherwise is a lengthy process with unending steps to achieve the goal. This holds true for both outward and inward transfer of funds. Also the costs associated are extravagant in nature
• They also provide both private and businesses to accept payments over the platforms of web and mobile. These Fintech startups intend on integrating payment processing into mobile and web apps without putting in extra efforts to maintain the merchant accounts. Steps are taken to ensure that there is no fraudulence that happens. The transfers have to be made directly into the bank account that is linked to the payee.
• Yet another bracket of Fintech companies exist that help individuals save manage and invest money. These Fintech companies essentially help in Personal Finance and retail Investment services. Also they help the individuals make better financial choices. Be it them wanting money or them wanting to save it.
• The infrastructural pertaining to old-age financial institutions are also be solved by these new Fintech organisations. There supremacy in technology and efficiency in finance is becoming popular amongst the people. They have enormously improved access to financial data and analytics is much easier and quicker now to get through to.
• Another intriguing Fintech Platform is providing access to crowdfunding . crowdfunding helps organisations in nascent stage to raise money and develop in the right direction.
• These companies initial focus lay on the core of finance, risk management and the incrementing revenues. However now it has expanded to user-friendliness and customer experience.
Fintech has not only disrupted traditional banking institutions, but has also made banking much easier for individuals. EarlySalary is one such organisation in the Fintech world. We at EarlySalary provide Personal loan upto a lakh in minutes through your smartphone. And it is a very simple process! Just login through your Facebook account, fill in a few details and get instant cash. So wanna get some cash?
