Dropline Overdraft

Dropline Overdraft

Understanding Dropline Overdraft Facility

A Dropline Overdraft facility allows a borrower to overdraw money from his or her current account up to a predetermined limit, with the withdrawal limit decreasing every year from the sanctioned level. The interest rate is only paid on the money withdrawn, not on the total amount borrowed.

Features of Dropline Overdraft Facility

• Each year, the withdrawal limit is reduced from the sanctioned limit.
• It is available as a secured and unsecured loan.
• In the event of an unsecured Dropline Overdraft facility, no collateral is required.
• The interest rate is calculated on a daily basis, although it is charged on a monthly basis.
• Borrowed funds are only credited to current accounts.
• It's possible to use it on a monthly, quarterly, half-yearly, or annual basis.
• The Dropline limit varies from bank to bank.
• Manufacturers, retailers, and traders are the most common users.

 

Documents Required

• Passport-sized photos.
• PAN card for the business.
• Documents proving your identification: Passport, driver's licence, voter's ID card, PAN card, Aadhar card.
• Address proof: Passport or utility bills (water/electricity bills) of the applicant.