Banks
have variety of schemes under Personal Finance to satisfy varying needs of the
banking public. Banks provide credit in the form of overdraft or loans. Overdraft facility is generally provided on
current account. Overdraft is a service
provided by a bank to utilize money even
when there is no balance in the customer’s account. It is a form of credit and one has to pay
interest for the overdraft drawn. It is
an arrangement made to cover the cash shortages. The rates differ from bank to
bank and depend on the time period also. It is not suitable for long period of
time. Bank loan is the money which one borrows from the bank for a specific
purpose for specific period with agreement for interest and repayment periods
etc.
