A Secured Drop Line Overdraft (OD) is a working capital facility provided against collateral (property or asset), where the sanctioned limit gradually reduces over time. It is ideal for businesses that need funds with a structured repayment approach.
It is a credit facility where the borrower gets a sanctioned OD limit backed by collateral, but unlike regular OD, the limit reduces periodically (monthly/quarterly) as per a predefined schedule. Interest is charged only on the utilized amount.
Lower interest due to collateral backing
Higher limits compared to unsecured OD
Pay interest only on utilized amount
Helps in disciplined repayment
Withdraw anytime within limit
Based on property value + business profile
Lower than unsecured OD (approx 8% – 14% p.a.)
3 – 10 years
Fixed drop line schedule (monthly/annual)
Interest + gradual principal reduction
It offers the perfect balance of flexibility + discipline, giving access to large funds at lower interest while ensuring gradual repayment — making it ideal for stable and growing businesses.
