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What is the difference between drawing power and outstanding amount?
Drawing power is the amount of loan that is to be paid back by you according to the originally approved EMI schedule at the time of loan sanction. Outstanding amount is the actual remaining amount of loan that you have to pay to the bank at any point of time.
Why is drawing power more than outstanding?
The unpaid balance of the loan you have to return to the creditor at that point is pending. Outstanding debt balance is higher than DP if you don’t pay daily, so it may be less than DP if you settle the EMI payment early for greater than you’re expected to pay.
What does drawing power mean in a loan account?
Drawing power is the amount that a customer can withdraw from the total limit that is sanctioned to him by the lending bank. The sanctioned limit is the total limit allotted to a customer by the financial institution for working capital requirements. This is the maximum amount that the borrowing company can utilize.
What is the difference between drawing power and outstanding amount of home loan?
Upon final disbursal, your Limit and Drawing Power will equal the sanctioned loan amount. These amounts will reduce with each EMI payment. Drawing Power = Outstanding principal loan amount. Available Balance = Any surplus amount parked in this account + accrued interest savings.
What does drawing power mean?
Definition of drawing power : the ability to attract a lot of people to a performance, event, etc. The team has a lot of drawing power.
What is outstanding loan amount?
An outstanding balance is the amount you owe on any debt that charges interest, like a credit card. Most often, it refers to the amount you owe from purchases and other transactions made with your credit card. It’s also called your current balance. Balance transfers. Interest charges.
What is loan outstanding amount?
An outstanding balance is the total amount still owed on a loan.
What does loan outstanding mean?
Outstanding debt is debt you owe to a creditor or multiple creditors. Outstanding debt can be on a credit card, personal loan, car loan, student loan, or even other types of balances including tax debt. Your debt is considered outstanding until the balance (the amount you owe) is fully paid off.
How is drawing power calculated?
Drawing Power is calculated after deducting margin from “Stock Less Creditors + Book Debts” for the month. Banks have a practice of updating drawing power based on monthly/quarterly closing stock-book debt and trade creditors’ statement submitted by the firm/company.
How do you calculate bank draw power?
Calculation of Drawing Power It is calculated by considering the total value of paid stock (Paid stock=Stock fewer Creditors) plus book debts (not more than 90 days old) and deducting margin from the same. In most of the cases, debtors up to 90 days are considered for calculating DP.