Overdraft Facility

Name: Investkraft
Address: 137, KD Block, Ground Floor, Pitampura, Delhi, 110034, IN
Telephone: 9797971876

Overdrafts (OD): A Lifeline for Short-Term Cash Flow Needs

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What is an Overdraft Facility?

An overdraft facility is a line of credit extended by a bank against your current account. It allows you to withdraw funds exceeding your account balance up to a pre-defined limit. This temporary credit line offers flexibility, enabling you to meet immediate financial needs without the hassle of applying for a separate loan. Remember, in the fast-paced business world, even the most meticulous planning can be disrupted. In such conditions, an overdraft can prove to be a lifesaver, providing a buffer of readily available funds.

Overdraft Facility EMI Calculator

Loan amount

₹

₹1,000

₹1,00,00,000

Rate of interest (p.a)

1 %

50%

Loan tenure

1 yrs

30 yrs

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Benefits & Features of Overdraft Facilities for Businesses

Overdrafts play a crucial role in managing a business's cash flow. Here's how:

Covers Short-Term Expenses

Unexpected bills, inventory purchases, or temporary gaps between receivables and payables can be bridged using an OD facility.

Improves Working Capital Management

ODs enhance your working capital, allowing you to seize time-sensitive opportunities or navigate seasonal fluctuations.

Boosts Financial Flexibility

Having an OD facility provides a safety net, ensuring you can meet immediate obligations without disrupting your operations.

Key Features of Overdraft Facility:

Pre-approved Limit

The bank sets a limit based on the applicant's creditworthiness and financial profile.

Interest on Usage

Interest is charged only on the amount utilized, not on the entire approved limit.

Flexible Repayment

Borrowers can repay the overdraft amount anytime within the tenure.

Renewable Facility

The overdraft limit can be renewed periodically based on usage and repayment history.

Who all can Apply for Overdraft Facility?

Individuals

Salaried Employees: Those with a regular income can avail overdrafts against their salary account.
Self-Employed Professionals: Doctors, lawyers, chartered accountants, etc., may be eligible based on their financial standing and income history.
High-Net-Worth Individuals (HNIs): Often granted overdrafts based on their investment portfolios or fixed deposits.

Businesses

Small and Medium Enterprises (SMEs): For working capital needs, such as inventory purchase, supplier payments, or cash flow management.
Large Corporations:To manage short-term liquidity requirements.
Startups:Depending on their financial stability and creditworthiness.

Eligibility Criteria for an Overdraft Facility for a Businessman

Established Track Record: Your business needs to have been running successfully for at least a year to show stability.
Strong Finances: You need to demonstrate consistent profits and good financial management. Keep your financial books in order.
Good Credit: A history of paying back loans on time is essential.
Solid Business Plan: You should have a clear plan for how your business will grow and make money.
Possible Collateral: You might need to offer something valuable as security for the overdraft, like property or equipment.
Bank Relationship: Having a good relationship with your bank can increase your chances of approval.

Documents Required for an Overdraft Facility

Business Registration Documents:

Registration certificate (e.g., Partnership Deed, Certificate of Incorporation)
GST Registration Certificate
PAN Card of the business

Financial Statements: :

Audited financial statements for the past 2-3 years
Profit & Loss account
Balance Sheet
Cash Flow Statement

Personal Documents:

PAN Card and Aadhaar Card of the proprietor/partners/directors
Income Tax Returns of the proprietor/partners/directors

Bank Statements:

Bank statements of the business accounts for the past 6-12 months

Proof of Address:

Proof of address of the business premises and residence

Collateral Documents (if applicable):

Documents related to the collateral offered (e.g., property documents, vehicle registration certificate)

Applying for an Overdraft Online

The application process for OD facilities is becoming increasingly streamlined. Many banks offer online applications at InvestKraft, allowing you to submit your request conveniently and receive a quick decision.

Visit InvestKraft and check the eligibility

Apply online for the OD.

Upload necessary documents and wait for the approval

Sign the necessary documents and get going

Interest & Charges Associated with Overdrafts

Overdraft is a very good facility and a useful option for businesses. It is made available for you subject to fulfillment of the minimum eligibility criteria. While ODs provide flexibility, they are not without costs. Here are some key charges to consider:

Interest: Banks charge interest on the amount utilized over your account balance.
Processing Fees: There may be one-time processing fees associated with setting up the OD facility.
Penalty Charges: Exceeding the OD limit can incur penalty charges.

Interest rate	Axis Bank - 10.75% p.a. onwards; HDFC - 10.75% - 25% p.a.; Tata Capital 12% p.a. onwards HDB Financial Services Ltd. - 8% - 26% p.a.
Processing Charges	usually 2% of the Overdraft amount+taxes
Pre-closure charge	generally, 2% +GST and varies based on the OD types and lenders
Bounce charges	most of the banks and NBFCs fix these charges at Rs. 500 + taxes in most of the cases

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Why choose Investkraft ?

72 hours processing

No asset loss

Fair interest from 1.25% per month

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What our customers say

I was worried about my business expansion. Through the online sources, I came to know about Investkfraft. After I contacted these professionals they helped me in documentation and verification work. Within a few days, I got the required loan in my account in very little time.

Amar kumar

While I was suffering from heart issues, doctors asked me to go for an angioplasty treatment. Due to higher fees, I was not able to get the treatment. One of my friends suggested me to get the load from Investkfraft. I did the same and got an easy personal loan in very little time and at a very low-interest rate.

Aman Singh

I always wanted my daughter to study abroad. However, due to high travelling and living costs, I was not able to send my daughter abroad to study. When I heard about Investkfraft, I reached them to get a personal loan. Within a few days and with less documentation work, I got the amount in my account with the help of which I was able to pay my daughter’s fees and travelling charges.

Vikash kumar

Terms We Offer*

Loan Amount

₹50 Thousands - ₹ 2 Crore

Interest Rates**

1 - 2% per month

Loan Tenure

1 month - 5 years

Pre-Closure Fee***

₹0/-

Frequently Asked Questions

Interest rates for overdraft facilities vary depending on several factors, including the borrower's creditworthiness, the amount of the overdraft, the bank's prevailing interest rates, and the tenure of the facility. The interest rates can vary between 10% and 20% annually, depending on the type of overdraft and the borrower’s creditworthiness.

Overdraft facilities typically have flexible repayment options. You can repay the utilized amount in full or in part, whenever it suits your cash flow. However, interest is charged on the utilized amount daily.

While banks may be more cautious with newly established businesses, it's still possible to obtain an overdraft facility. However, you might need to provide a strong business plan, personal guarantees, and potentially offer collateral to increase your chances of approval.

Overdraft facilities offer greater flexibility compared to term loans. You only pay interest on the amount utilized, and you can access funds as and when needed. Term loans involve fixed repayment schedules and interest rates.

Exceeding the overdraft limit can result in penalties and higher interest rates. In some cases, the bank may also demand immediate repayment of the outstanding amount. It's crucial to carefully monitor your overdraft utilization to avoid exceeding the limit.

Overdraft Facility

What is an Overdraft Facility?

Overdraft Facility EMI Calculator