Overdraft Limite

If you have an overdraft account, then your bank would be able to manage cheques that had otherwise bounced and ultimately returned without resulting in any sort of payment. In the case of a loan, the candidate pays interest over the outstanding balance linked to an overdraft loan.

Does an overdraft hamper your credit score? It is decided by your bank to opt for using its own funds to aid a specific overdraft. The other option is to associate an overdraft with a particular credit card.

Overdraft Limite

Advantages of Overdraft over Personal Loan

Quick Fund Release

To access a personal loan, there is a need to fulfill a lot of paperwork. Moreover, you are also bound to present a satisfactory CIBIL score to be eligible to acquire the loan. However, for accessing an Overdraft, you are not required to wait for so long as everything is managed in a quick method.

As soon as you have completed the initial setup concerned for an Overdraft, money can be withdrawn within a few hours. On the other hand, if you have opted for a Personal Loan, there would be a similar process every single time when money is transferred, and that too under 3-5 business days.


With personal loans, there isn’t much scope for flexibility. The customer is required to pay EMI throughout the loan duration, with the payments being timely delivered. However, this can become a huge mess for many people, particularly for those who need to offer a larger amount of Variable Pay. Hence, a personal loan cannot be seen as an ideal option for such situations.

Under a personal overdraft, you are allowed to make money based on your limit as well as payback as per your convenience. The customer can repay the amount within days or months, depending on their capability. This makes this option quite flexible or elastic.

Credit Score Safety

If an individual is frequently availing or repaying loans, there is a greater chance that his/her credit score might change repeatedly. If this happens frequently, then it would be difficult for you to obtain credit cards or loan in the near future.

This condition can be settled by opting for OD Limit. Under this facility, you will be offered only a single loan that you are frequently servicing. Hence, this would offer a positive lift to your score.