DCT Multiservices LLP - Your Trusted Financial Partner
Office no 101,102 1st Floor,Mittal chamber building , jm road Shivaji Nagar 411005
manasbaranwal@gmail.com +91 8600143860

Overdraft Facility (OD)

Quick Liquidity Solution

Overdraft Facility: Enabling Financial Flexibility for Individuals and Businesses

An Overdraft (OD) facility is a temporary line of credit extended by a bank, allowing you to withdraw funds from your account even if the balance is zero, up to a pre-defined limit. This is a crucial tool for managing short-term funding gaps or emergency needs.

Whether it's a Salary Overdraft for personal needs or a Business Overdraft for managing working capital, this facility provides instant liquidity. The major advantage is that you only pay interest on the exact amount you utilize and for the duration you use it.

Interest Only on Utilized Amount
Fast Disbursals and Minimal Documentation
Handles Temporary Cash Flow Mismatches
No Pre-closure Charges (Generally)
Overdraft Facility and Financial Flexibility

Inquire About Overdraft Limits

Start your application for a flexible OD limit. Please fill in your basic details and required amount, and we will connect you with the best available offers.

Key Features and Advantages of Overdraft

The OD facility is celebrated for its flexibility and cost-effectiveness when used as a stop-gap management tool.

Interest Cost Benefit

You are only charged interest on the specific amount of the overdraft that you actually withdraw (utilize), not on the entire sanctioned limit.

Timely Payments

The facility ensures you can make urgent, timely payments (e.g., vendor dues, taxes, salaries) even when your account balance is temporarily low.

Flexibility and Easy Use

Use and repay the utilized amount multiple times within the OD limit, offering continuous and immediate access to funds without re-applying.

Minimal Paperwork

Once the limit is sanctioned, accessing the funds requires less paperwork compared to traditional term loans, enabling faster disbursals.

Eligibility for Overdraft Facilities

Eligibility varies between personal (Salary OD) and business ODs, and is based primarily on your income, credit history, and relationship with the bank.

For Salaried Individuals (Salary Overdraft)
  • Your salary account must be held with the lending bank, with regular salary credits.
  • Minimum net monthly income requirement (e.g., ₹15,000/- or higher, depending on the bank).
  • Your employer company should be on the bank's approved list for the OD facility.
  • The typical limit is often up to twice your in-hand monthly salary.
For Businesses (Business Overdraft)

The limit is set primarily based on the business's working capital cycle and credit profile:

  • Creditworthiness: Strong credit profile and good repayment history are mandatory.
  • Working Capital: Assessment of the business's working capital needs and turnover.
  • Collateral: OD for businesses may be secured against assets, property, or fixed deposits.
  • Bank Relationship: The duration and depth of the relationship with the bank play a key role.

Purpose and Responsible Usage of Overdraft

While an OD offers great financial freedom, it is primarily designed for short-term liquidity management and not long-term funding.

Important Note on Usage

An OD facility typically comes with a higher cost than standard term loans. It should be utilized as a stop-gap arrangement or for emergency funding, rather than a routine source of working capital. High dependency on OD for long periods may indicate poor working capital management and liquidity stress.

Key Objectives of the OD Facility

  • Handle Timing Mismatch: Effectively manage temporary shortfalls between funds received and funds required (e.g., waiting for invoice payments).
  • Emergency Buffer: Act as an immediate safety net for unforeseen personal or business expenses.
  • Avoid Penalties: Ensure crucial payments like EMIs, cheques, or utility bills are not missed due to lack of balance, avoiding bounced charges.
  • Flexible Repayment: No fixed monthly EMI; repayments can be made any time, reducing the interest burden immediately.

Frequently Asked Questions on Overdraft

Find detailed answers to the most common queries regarding the Overdraft facility.

The OD limit is set by the bank based on factors that include your creditworthiness, the amount of working capital required (for businesses), the value of collateral provided (if secured OD), the frequency of your deposits, and your relationship history with the bank.

Overdrawn balances are typically due on demand. It is crucial to make a deposit to cover the overdraft amount as quickly as possible to avoid continuous interest accrual and keep your account in good standing.

An account can become overdrawn due to various transactions, including payment of cheques, electronic fund transfers (like NEFT/RTGS), payments authorized by you (e.g., standing instructions or card payments), and bank service charges.

Yes, the OD facility functions as a revolving credit line. As you repay the utilized amount, the available limit is restored, allowing you to use it again without a new application, as long as the facility is renewed and active.
DCT Multiservices LLP - Your Trusted Financial Partner

Our Office

Office no 101,102 first floor Mittal chamber building near Panchali hotel jm road Shivaji Nagar 411005

+91 8600143860

+91 7030143860

manasbaranwal@gmail.com

sales@dctfinmultiservices.com

backoffice@dctfinmultiservices.com

manas@dctfinmultiservices.com

Services

Home Loans Business Financing Investment Advisory Insurance Solutions Tax Planning

Quick Links

About Us Contact Us Our Services Terms & Conditions Privacy Policy
© DCT Multiservices LLP, All Rights Reserved.
Design & Developed by Ans Technologies