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Dropline Overdraft Limit

Dropline Overdraft Limit

Dropline overdraft is a service that allows you to overdraw your current account up to an agreed limit. Get Dropline Overdraft in Delhi at Lending Bulls. Overdraft is flexible and works in a way where you pay interest only for the time you use the money. You can deposit money into the account at any time to reduce the amount owed or withdraw as long as you need it as long as you don't exceed the limit. The interest rate is paid only on the cash withdrawn and not on the total borrowing limit. Money can be deposited at any time to reduce the outstanding amount. The interest rate is calculated daily and charged at the end of each month. Overdraft on property is a flexible product that allows you to avail term loan and overdraft facility on residential or commercial property. This product is useful for professionals, sole proprietorship, proprietorship firms, partnership firms or a private limited company.

Let us understand the Dropline Overdraft facility with an example:

If the initial tenure of the overdraft facility is 60 months and the basic overdraft limit granted is Rs. 10 lakhs, then after 1 month the operating limit will be automatically reduced by 10,00,000/60 = Rs. 16,666. This means the operating limit available at the end of the first month (10,00,000 - 16,666) = Rs. 9,83,334. This calculation will continue for the second month as well and every month onwards till the last month of the repayment period.

  • Dropline overdraft is a financial instrument that allows a borrower to withdraw cash from his current account up to an agreed limit, with the withdrawal limit falling below the sanctioned limit every month. The interest rate is paid only on the cash withdrawn and not on the total borrowing limit. Money can be deposited at any time to reduce the outstanding amount. The interest rate is calculated on a daily basis and is charged at the end of each month.


Features of Dropline Overdraft:

  • Withdrawal limit falls below the initially sanctioned limit every month
  • Comes as both secured and unsecured loan
  • No collateral required to be deposited in case of unsecured dropline overdraft facility
  • Interest rate is charged on monthly basis but calculated on daily basis
  • The borrowing limit can go up to Rs. 50 crores, though it depends on the discretion of the bank
  • The amount borrowed is credited to current accounts only
  • Should be monthly, quarterly, half yearly or yearly basis
  • Usually, the dropline limit is fixed for 1 - 15 years, it may vary from bank to bank
  • One-time processing fee is charged
  • Renewal fee will vary bank to bank
  • It is a combination of term loan and overdraft facility
  • Mostly chosen by manufacturers, retailers and traders

  • Every businessman wants to avoid cash crunch, especially during the busy season or when they have expansion plans. While the market offers business loans, the dropline overdraft loan facility is an extension of the same that can be easily used whenever required.

    Interest is charged only on the amount used, considering it is easy on the pocket! Other benefits are as follows:

    1. High loan amount - An overdraft loan of Rs 20 lakh to Rs 100 crore can be availed depending on the value and income of the property being pledged.
    2. Easy of paying back - The longer tenure helps the borrower to plan the repayment with ease. The average tenure of Dropline Overdraft Loan is 10 years, which gives the borrower the flexibility to repay the EMI from the earned income.
    3. Prompt Processing - Debt helps businesses to get overdraft loans within 6-7 days of processing thereby helping the individual to get money instantly.


Eligibility for Dropline Overdraft Limit:

  • Self-employed and companies with minimum turnover of Rs. 1 Crore to 500 Crore.
  • Audited finance.
  • Minimum 3 years in current profit-making business and 5 years of total business experience

Who can apply:

  • Self Employed (Private Limited Company and Partnership Firm)
  • Self Employed (Individual)
  • Self Employed (Private Limited Company and Partnership Firm) includes private companies and partnership firms in the business of manufacturing, trading or services.

With-

  • Minimum turnover Rs. 1 Crore including financial
  • Years in business: Min. 3 years’ experience in current business plus % of total business experience of 3 years
  • Profitable business of 2 years.
  • Minimum Annual Income (ITR): Rs. 1.5 lakh per annum

Required documents-

  • Pan Card
  • Address Proof (Ration Card, Telephone / Electricity Bill, Passport, Lease Agreement / Business License / Sales Tax Certificate)
  • Latest 1 Year Bank Statement
  • ITR (Computation of Income) Balance Sheet and Profit & Loss A/c for the last 3 years. And financial audit should be done.
  • Continuity Proof (ITR / Business License / Establishment / Sales Tax Certificate)
  • Self-employed individuals include sales owners, partners, and directors.

With-

  • Applicant's minimum age: 21 years
  • Maximum age of applicant on loan maturity: 65 years
  • Minimum turnover Rs. 1 Crore, financial audit should be done.
  • Years in Business: Minimum 3 years and total business experience in current business
  • Minimum Annual Income (ITR): Rs. 1.5 lakh per annum

Required Documents:

  • Proof of Identity (Passport / Voter ID / Driving License / PAN Card)
  • Address Proof (Ration Card Tel/Elect. Bill/Lease Agreement/Passport/Business License/Sales Tax Certificate)
  • Bank statement (last 1 Year)
  • Latest ITR and financial audit should be done along with calculation of Income, Balance Sheet and Profit and Loss Account for the last 3 years.
  • Proof of Continuity (ITR / Trade License / Establishment / Sales Tax Certificate)
  • Other Mandatory Documents (Single Proposal Declaration or attested copy of Partnership Deed, attested true copy of Memorandum and Articles of Association (attested by the Director) and Board Resolution (original)

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