Managing cash flow is one of the biggest challenges for individuals and businesses. An Overdraft (OD) facility is a flexible financial solution that helps you access funds when needed while paying interest only on the amount utilized. Understanding the difference between collateral-based and non-collateral OD facilities can help you choose the right option.

What Is an OD Facility?

An OD facility allows you to withdraw money from a sanctioned credit limit whenever required. Unlike a term loan, you don’t pay interest on the entire sanctioned amount—only on the portion you use.

Types of OD Facilities

1. Collateral-Based OD Facility

This OD is secured against assets such as:

• Residential or commercial property

• Fixed deposits

• Other acceptable securities

Key Benefits:

• Higher credit limits

• Lower interest rates

• Longer renewal options

• Ideal for businesses, developers, and high-value requirements

Collateral-based OD facilities are commonly used by business owners and land developers who require large, flexible funding.

2. Non-Collateral OD Facility

This OD is provided without pledging assets and is based on:

• Business turnover

• Banking transactions

• Credit profile

Key Benefits:

• Faster processing

• No property mortgage

• Suitable for short-term working capital needs

Who Should Opt for an OD Facility?

• Businesses with fluctuating cash flow

• Professionals with irregular income

• Developers managing multiple project expenses

• Individuals seeking flexible credit

Interest & Repayment

Interest is calculated daily on the utilized amount, making OD facilities cost-effective when used smartly. Regular renewals are required, usually annually.

Why Choose Ace Kapital Loans for OD Facilities?

Ace Kapital Loans offers both collateral and non-collateral OD solutions, customized to your financial profile. With access to leading banks and NBFCs, we ensure:

• Competitive interest rates

• Higher approval chances

• Structured limits

• End-to-end support

If flexibility and cash flow management are priorities, an OD facility through Ace Kapital Loans is the smart choice.