A Secured Overdraft (OD) is a flexible credit facility provided by banks or NBFCs against collateral such as property, fixed deposits, or other assets. It allows businesses or individuals to withdraw funds as needed, up to a sanctioned limit.
It is a working capital facility where the borrower can withdraw, repay, and re-use funds multiple times within the approved limit. Interest is charged only on the amount utilized, not on the full limit.
Withdraw funds anytime as per requirement
Pay interest only on utilized amount
Due to collateral security
Revolving credit facility
Ideal for urgent cash flow needs
Based on value of collateral
(usually 50%–75%)
Lower compared to unsecured loans
1 year
(renewable annually)
Flexible (no fixed EMI, interest payable monthly)
It provides liquidity, flexibility, and cost efficiency, making it one of the best tools for managing short-term financial needs.
