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An overdraft against property or deposits, for a service business that carries no stock.
An overdraft gives your current account a negative limit. You can draw below zero up to the sanctioned amount and repay whenever cash comes in. Interest is charged only on the amount and the days actually used.
Service businesses, consultants, contractors, agencies and clinics, which carry little or no stock and therefore cannot offer the stock security a cash credit limit is built on. Here the security is normally property, or a fixed deposit.
Many lenders offer a dropline overdraft where the sanctioned limit steps down every month over the tenure, behaving like a term loan in structure but an overdraft in operation. It suits a business that wants flexibility now and a definite end date later.
The cheapest option of all, if you have a deposit you do not want to break. Banks lend up to 90% of the deposit value at roughly 1% to 2% above the deposit rate. Your FD keeps earning interest while you use the money.
We compare the true cost across structures. A dropline OD with a low rate but a high annual renewal fee often costs more than a plain OD priced slightly higher, and the difference only shows once you add it all up.
Charged daily on the drawn amount. Keep the account in credit for a month and you pay nothing for that month.
Secured on property or on a fixed deposit, which makes it workable for service businesses with no inventory.
An overdraft against your own fixed deposit is the cheapest borrowing available, and the deposit keeps earning.
A dropline OD reduces the limit each month, giving you flexibility now and a firm closure date later.
| Business vintage | At least 2 to 3 years, or immediately if the OD is against a fixed deposit |
|---|---|
| Security | Residential or commercial property, or a fixed deposit |
| Funding | 50% to 70% of property value, or up to 90% of deposit value |
| Income proof | Last 2 years ITR and 12 months of bank statements |
| Credit score | 700 and above, waived where the security is a fixed deposit |
These are typical criteria. Individual lenders vary, and we will tell you which ones are flexible on your particular case.
You do not need any of these to enquire. We only ask for documents once we know which lender we are approaching.
Pre-filled with this product's own rate band and limits.
Pre-filled with the indicative rate band for Business Overdraft (OD). Move the sliders to match your own case.
Ten crore one lakh fifty thousand
1 yr
Your monthly EMI
₹87,35,061
for 1 yr
These numbers are indicative. Your actual offer depends on the lender. Most loans in India are floating rate, so the EMI can change when the RBI moves rates.
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