Overdraft limit
Tap extra liquidity up to an approved ceiling—interest only on what you actually use, when you use it.
An overdraft behaves more like a ceiling than a fixed loan: draw within the approved limit, repay as cash comes in, and pay interest on the outstanding balance rather than on a lump sum you never needed.
We help check whether your profile and banking pattern suit an OD structure, coordinate with partner programs, and explain how limits and charges work before you commit.
Eligibility criteria
- Active current account with a banking partner that offers an overdraft or CC limit programme—or willingness to open / move accounts as per programme rules.
- Business or professional profile with vintage and turnover norms the institution sets for non-fund-based or OD facilities.
- Demonstrated account turnover and inflow stability; erratic or largely cash-only flows may need a different structure.
- Credit bureau and account conduct within thresholds; returned instruments or chronic overdraws are red flags lenders review.
- Comfortable servicing interest on utilized amounts and any renewal / review conditions the facility carries.
Documents usually required
- KYC of entity and authorized signatories; PAN; firm / company registration and GST where applicable.
- Last 6–12 months of current account statements (and sometimes all operative accounts).
- Income and business proof: ITR, financials, GST returns, debt schedule, and existing banking limits.
- Security or collateral documents when the OD is secured—title deeds, valuations, lien marking as per bank process.
- Board resolutions, partnership authorizations, or proprietor declarations as the sanction letter requires.
Key features
- Draw only what you need up to the sanctioned limit; interest typically accrues on utilized balance, not the full line.
- Repayment flexibility: credits to the account reduce utilization and interest in line with product terms.
- Renewal or enhancement reviewed on performance—useful when sales grow but remain cyclical.
- Works alongside running operations without a fresh loan application for every short-term need (within limit life).
- Charges: processing, renewal, and non-utilization fees if any are disclosed in the sanction and schedule.
Benefits of an overdraft limit
- Liquidity buffer for receivable gaps, seasonal spikes, or opportunistic stock—without locking into a fixed EMI on undrawn amounts.
- Interest cost aligns more closely with actual usage than a lump-sum term loan when needs fluctuate.
- Can be simpler operationally once approved: draw and repay within the limit as cash moves.
- Pairs well with businesses that have uneven but predictable inflows once explained to the lender.
- Clarity from day one on limit, security, and review dates—fewer mid-cycle surprises when paperwork is honest.
Overdraft FAQs
How is OD different from a term loan?
A term loan disburses a fixed amount with a fixed repayment schedule. An overdraft is a ceiling on your current account—you use, repay, and pay interest on what stays drawn. Pick the structure that matches how your cash actually moves.
Is interest charged daily or monthly?
Institutions differ: many compute on daily product basis and debit monthly or on a set cycle. Your sanction letter and KFS spell out the exact method.
What happens if I do not use the full limit?
You usually pay little or no interest on undrawn amounts in classic OD structures. Some programmes levy commitment or non-utilization charges—we flag those before you commit.
Can the limit be increased?
Often yes, after a review of improved turnover, security, or account conduct. Enhancement is a fresh credit call by the lender.
Do I need a current account with the same bank?
Typically yes—the limit is linked to your operating account. If you are consolidating banking, we factor timing and continuity into the plan.
Ready to apply?
The next screen is the eligibility / application form for this product.