What is the difference between an overdraft and a loan against an FD?

Customer can collect the physical documents from the loan centre

After my home loan is repaid, how long will it take for me to get my property documents? What is the procedure to close a home loan account?
 
A customer wanting to close his/her home loan has to get his foreclosure letter, which will have details of the outstanding loan outstanding. Once the customer has the same, he/she can walk in with a Demand Draft for the closure amount and deposit it at any of the loan centres. The loan account shall get closed typically within five to six days of the payment being accepted (on the funds getting cleared). Once the entire loan amount is repaid, the customer’s property papers will be sent to the loan centre of the customer's choice. The customer can then collect the physical documents from the loan centre. The time period for this shall be typically around 21 days.

 
I have converted a large transaction on my credit card into a 12-month EMI. I have finished six months. I now have funds to repay the remaining amount, but my bank is saying I cannot do it. Are they right in saying so?
 

Banks allow foreclosure of all installment programmes related to credit cards. There is, however, pre-payment fees that is charged to the customers which is 1.5 per cent of principal outstanding at the time of foreclosure with a minimum fee limit. If any product is purchased with an EMI option at the merchant, the foreclosure fee is 0. However, the bank does not allow partial foreclosure, so if the customer wishes to foreclose he/she has to pay the entire principal outstanding at the time of foreclosure.

 
My bank has started charging for a personal banker service. The charge is Rs 100 per quarter. Can I refuse the service if I don't want to pay the charge?
 
Generally, most banks which provide personalised banking services delivered through a dedicated personal banker/relationship manager do not charge for such services. If your bank has a practice of charging for the same, you may approach them for a waiver of the said charges if you do not wish to avail of that service, or choose to opt for a programme that does not offer that service. Alternatively, you may look at other bank programmes which offer a similar service at no charge.

 
My bank has cut the Marginal cost of funds based lending rate (MCLR). Since my home loan is linked to the benchmark prime lending rate (BPLR), does this mean my loan rate will not decrease? Should I change to MCLR? Is there a charge for this? Should I wait until the end of the year to do it?
 
MCLR is applicable only on those home loans which are sanctioned on or after April 1, 2016, with a floating rate of interest. Therefore, a cut in MCLR (or a reset in MCLR) would not decrease the interest rate of home loans which are linked to BPLR or the base rate. Customers whose home loans are linked to BPLR or base rate can switch their home loans to MCLR. If a customer wants to switch, he can do so by paying switch fees and by signing a Supplementary Agreement.

 
What is the difference between an overdraft and a loan against fixed deposit (FD)? Which is better in case I want funds in an emergency?
 
Both loan against FD and overdraft against FD are secured loans where client borrows against a FD kept as a collateral with the bank. Loan against FD is generally a term loan whereas overdraft against FD is an overdraft facility which is taken against FDs held with the bank. Overdraft facility is always preferable, compared to a term loan. An overdraft facility is a hassle-free credit facility/line where a customer can utilise the fund at any given point of time. Unlike a term loan where a customer has to pay fixed installment, for overdraft the customer pays the interest only on utilisation. This offers great flexibility to the customer.

  The views expressed are the expert’s own. Send your queries to yourmoney@bsmail.in