Running Finance is another type of loan product offered by Banks. This can be used as an alternative to a Term Loan. Running Finance Facility is a more flexible and cost effective product, where you do not need to commit to a long tenured loan or monthly payments.
With Running Finance Facility the bank approves a specific cash limit for you to utilize. This limit can be up to 2 million rupees, without any security or collateral. Running Finance Facility is based on “Pay as you Utilize” principal. When you use any amount from your Running Finance Facility you will be required to pay back the amount utilized plus mark-up / interest. You can utilize your Running Finance Facility through a check book or debit card issued by the bank.
Banks typically charge an annual fee on Running Finance Facility, however policies on how this can be waived varies from bank to bank.
For instance you received a running finance of Rs. 500,000, and you took out only Rs. 150,000 for a period of 15 days. You will be charged interest on the Rs. 150,000 for 15 days only. At the end of the month your bank will send you a statement informing you of the mark-up / interest you are required to pay.
As illustrated above you should use Running Finance Facility for your immediate short term cash needs. You can use Running Finance Facility to pay your Credit Card bills, utility bills, unforeseen expenses such as car repairs, emergency medical treatments etc.
Eligibility for Running Finance varies from one bank to the other. However a basic framework of eligibility is as follows:
Pakistani National Identity Card Holder
Every bank has their own set of internal policies which govern what documentation is required for running finance, below are a few items common to all banks:
Comparebanks.com provides a simple, quick and reliable way to compare offerings of multiple banks for your Running Finance needs. Quickly identify which banks are offering the best rates; easily compare different service fees and terms and conditions.
Late payments: banks will charge you a fee for making late payments.
You can get any amount ranging from Rs. 50,000 to Rs. 2 million depending on the bank’s assessment of your income level and financial capacity.
Yes, if you want to terminate this facility your bank will charge you a fee.
You can make repayments using;
Running Finance Facility is typically offered for one year; it is reviewed and renewed at the end of the year.
Your case will typically be processed in 10 days time from the date all documents have been submitted.
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