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Overdraft Limit

A safety cushion on your current account.

Facility: Account overdraft
Interest: Charged on usage only
Security: Secured or unsecured

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At A Glance

Purpose: A ready limit on your current account to cover gaps between paying suppliers and getting paid
Repayment: No EMI, just interest on the running balance
Who can apply: An active current account with regular credits

See what you will need

The Short Version

What Overdraft Limit actually does for you.

An overdraft is a ready limit on your current account. It helps cover the short gap between paying your suppliers and receiving payment from your customers.

What's included

Available secured (property, FDs, securities) or unsecured
No EMI — just interest on the running balance each month
Live and usable as soon as it's sanctioned
Reviewed and renewed on an annual cycle

Do you qualify?

An active current account with regular credits
Documented proof of business or professional income
A clean credit report with no ongoing defaults
Self-employed business owner or professional with a steady income
Proprietorship, partnership, LLP or company

Which One Are You

SalariedYou draw a fixed monthly salary from an employer, in a private company, a government job or a public-sector unit. Lenders mainly check your salary slips, Form 16 and the salary credits in your bank account, and how long you have been with your employer. A steady job and a regular record of salary credits usually make the process simpler.

Proprietor / ProfessionalYou run a business in your own name, or practise a profession such as medicine, law, accountancy or architecture. There is no separate company, so the lender looks at you and the business together: your ITRs, your financial statements and your business bank account. Clear books and returns filed on time help a lot.

Partnership / LLPThe business is a partnership firm or an LLP. The lender checks the firm's registration, its financials and its bank statements, and also the standing of each partner, so every partner's KYC and tax returns are usually needed. A signed partnership deed that allows borrowing keeps things smooth.

CompanyThe business is a private or public limited company. The lender checks the incorporation papers, the directors and the shareholding, the company's audited financials and its bank statements. A board resolution authorising the loan is usually needed, and directors may be asked to stand as guarantors.

Documents Required (Checklist)

For Salaried

Last 3 months' salary slips
Last 6 months' bank statement showing salary credits
Latest Form 16 (or last 2 years'), and ITR with Form 26AS if your income is taxable
Details of existing loans, with EMIs and statements

For Every Applicant

KYC (PAN, Aadhaar, address proof)

This is the usual list for each type of applicant. Get the exact checklist for overdraft limit, sent as a PDF you can save or print.

Fees and other charges

Besides interest, a lender may charge a few fees. It helps to know them before you apply, so there are no surprises.

Processing fee

A percentage of the limit plus GST, often somewhere between about 0.5% and 1.5%. It is charged when the limit is sanctioned and again when it is renewed or enhanced.

Annual review or renewal fee

Working-capital limits are reviewed every year. Many lenders charge a renewal or review fee at that point.

Inspection, valuation and legal charges

Where the limit is backed by stock, receivables or property, the lender may charge for inspections, valuations or a legal check.

Penal charges

Going over the sanctioned limit, or not routing enough business through the account, can attract extra interest or charges. Each lender sets its own terms.

Our service fee

For this facility we charge a service fee for taking your file from lender shortlist to disbursal. It covers comparing lenders for you, preparing and checking your documents, answering the lender's queries and following up until the money reaches you. We tell you the amount in writing before you go ahead, so you know exactly what you are paying and nothing comes as a surprise.

These are general guides and every lender sets its own fees. Your expert will share the exact charges in writing before you sign.

Why Growth Capital Services

One conversation, many lenders to compare.

We are a loan consultant, not the lender. We help you compare options from 75+ Banks and NBFCs, prepare your documents, and follow your application through each step.

Check Your Eligibility Talk to Our Loan Expert

Important note: Interest rate, loan amount, tenure, charges, eligibility, approval and disbursement depend on the policy of the respective Bank or NBFC, your profile, credit assessment and the applicable terms. Growth Capital Services is a loan consultant and does not lend money itself. The details on this page are for general information.

Run the numbers

Calculators for your Overdraft Limit

Try your own figures before you apply — nothing is saved or sent.

Exclusive to GCS

Working Capital Limit Estimator

Based on the RBI Nayak Committee turnover method used by most banks for MSME Cash Credit, Overdraft, CGTMSE and Working Capital Term Loan limits.

Projected Annual Turnover

₹2.00 Cr

₹1 L₹50 Cr

Working Capital Gap

₹50.00 L

25% of turnover

Your Margin Money

₹10.00 L

5% of turnover

Indicative Bank Finance

₹40.00 L

20% of projected turnover — the portion typically financeable via Cash Credit, Overdraft or a Working Capital Term Loan. Actual sanction depends on financials, banking history and lender policy.

Talk to an Expert

Step-by-step guide

Overdraft Limit process, step by step.

An overdraft limit is a cushion on your current account. Here is how to get one.

Tell us your need

Share the limit you would like and how your account runs today.

Check your account record

We review your banking history and turnover to see what is realistic.

Match a lender

We shortlist banks and lenders who offer overdrafts on your kind of account.

Documents and sanction

You submit KYC and business papers, and the lender sanctions the limit.

Use as needed

You draw when you need to, and interest is charged on the amount used.

With GCS, your expert looks at your profile, matches it with suitable lenders, and coordinates with the banks for you. That means less confusion and more confidence when you apply.

Worth Comparing