Bank OD Loan – Meaning, Benefits, and How to Apply in India (2025)

Need quick access to funds without taking a full loan? A Bank OD Loan (Overdraft Loan) might be the solution. It’s one of the most flexible forms of credit available to both individuals and businesses, often with interest charged only on the amount used.

In this guide by Bravima Solution Pvt Ltd, we’ll explain:

What a Bank OD Loan is
How it works
Its benefits
How to apply for it with Indian banks and NBFCs like Bajaj Finserv, Tata Capital, and more.

What Is a Bank OD Loan?

A Bank Overdraft (OD) Loan is a credit facility that allows you to withdraw money beyond your account balance, up to a pre-approved limit.

Think of it like a short-term loan linked to your current or salary account. You’re charged interest only on the amount utilized, not the total limit.

Types of OD Loans

Secured Overdraft Loan – Backed by collateral such as Fixed Deposit, Property, Insurance Policy, etc.
Unsecured Overdraft Loan – Given based on credit score, income, or business performance (higher interest rate).

How Does a Bank OD Work?

Example:

You get an OD limit of ₹5,00,000. You use ₹2,00,000.

You pay interest only on ₹2L, not the full ₹5L.
Once you repay ₹2L, your full limit is restored.

It’s a revolving credit, meaning you can borrow and repay multiple times within the limit.

Low Balance? Get an Overdraft Loan in Minutes!

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Key Features of Bank OD Loans

Feature	Description
Credit Limit	₹50,000 to ₹50 Lakhs (based on profile)
Tenure	Renewable every 1 year or fixed period
Interest Rate	9% to 18% p.a. (varies by lender)
Repayment	Flexible – interest paid monthly
Collateral Required	Optional (depends on lender/type)
Disbursal Time	Within 2–7 working days

Top Banks & NBFCs Offering OD Loans (2025)

Lender	OD Loan Type	Max Limit
HDFC Bank	Business/Salary OD	₹50 Lakhs+
ICICI Bank	Business Overdraft	₹40 Lakhs
Kotak Mahindra Bank	Business/Working Capital OD	₹75 Lakhs
Axis Bank	Secured/Unsecured OD	₹50 Lakhs
Bajaj Finserv	Flexi Personal Loan (OD-style)	₹25 Lakhs
Tata Capital	OD under Business Loan Products	₹30–50 Lakhs
IndusInd Bank	Overdraft for Businesses	Custom limits

📌 Bravima Tip: NBFC overdraft loans may have faster approval but higher interest than traditional banks.

Who Can Apply for a Bank OD Loan?

For Salaried Individuals:

Salary > ₹30,000/month
Minimum 6–12 months job stability
Good credit score (700+)

For Businesses/Professionals:

Business vintage of 1+ year
GST & ITR filings
Current account in applying bank
Positive cash flow

Avoid Bounced Checks—Apply for an Overdraft Loan Now!

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Documents Required

For Salaried	For Businesses/Professionals
PAN, Aadhaar, Photo	PAN, Aadhaar, Business proof
Salary slips (3–6 months)	ITR (last 2 years), GST returns
Bank statement (6 months)	Bank statement (12 months)
Employment proof	Balance Sheet & P&L (CA-certified)

Benefits of OD Loans

Flexible usage: Withdraw only what you need
Pay interest only on used amount
No fixed EMI pressure
Revolving credit – money gets reused
Great for business cash flow or salary-linked needs

Things to Watch Out For

Interest is charged daily—keep usage low to save
Some banks charge renewal or processing fees
Overuse can affect CIBIL score

Bravima Solution Advice

At Bravima Solution Pvt Ltd, we help you:

Find the best OD loan option based on your income or business
Connect with NBFCs like Bajaj Finserv & Tata Capital for flexible overdrafts
Support with documentation, application, and fast approval

💬 Need funds without full loan commitment? Reach out to us for tailored OD loan recommendations.