A flexible credit line that lets you withdraw funds as needed
An Overdraft (OD) facility is a pre-approved credit limit on your current account that allows you to withdraw more money than available in your account. Unlike term loans where you receive the entire amount upfront, OD gives you the flexibility to withdraw only what you need, when you need it.
Best Part: You pay interest only on the amount utilized, not on the entire sanctioned limit. This makes it a cost-effective solution for managing cash flow fluctuations and working capital needs.
Interest charged only on the utilized portion, not on entire limit
Repay and reuse the limit multiple times without reapplication
Withdraw funds instantly 24/7 through your current account
No mandatory monthly EMI - repay as per your cash flow
Get OD limits up to ₹10 crores based on business turnover
Available against property, FD, or cash collateral
COMPARISON
Understand the key differences
| Feature | Overdraft (OD) | Term Loan |
|---|---|---|
| Disbursal | Credit limit (withdraw as needed) | Full amount disbursed |
| Interest Charged On | Only utilized amount | Entire loan amount |
| Repayment | Flexible - pay as per cash flow | Fixed monthly EMI |
| Reusability | Revolving facility | One-time |
| Tenure | Renewable annually | Fixed (1-10 years) |
| Best For | Working capital needs | Long-term investments |
| Processing Time | 2-5 days | 5-10 days |
| Withdrawal Frequency | Unlimited | Not applicable |
IDEAL USAGE
KYC Documents
ITR (2-3 Years)
Bank Statement (12 months)
Financial Statements
Business Registration
Property Papers (if secured)
FINANCIAL PLANNING TOOLS
Calculate your overdraft interest or compare balance transfer savings
💡 Smart Tip:
You only pay interest on ₹7,50,000, not on the full ₹10,00,000 limit. This saves you ₹2,188/month compared to a term loan!
OVERDRAFT FAQS
Get instant overdraft facility approval with competitive rates