Dropline Overdraft (DLOD) meaning
Dropline Overdraft (DLOD) is a facility granted to the customer by the financial institution where businesses can overdraw from their current account up to a limit that is agreed upon by the banker. An Overdraft Facility is one of the most efficient forms of borrowing as one needs to pay interest only for the amount of money withdrawn.
Thus, the dropline overdraft is almost similar to an Overdraft in all cases except the availability of the limit. This withdrawal limit reduces each month from the limit which is sanctioned. However, the calculation of the Interest rate is done daily and it is charged at the month’s end. You will be charged only for the amount used, So, you can always park your funds in a virtual account whenever funds are not in use.
Important features of Drop line Overdraft:
It can come in as both forms of loan i.e. Secured loan and Unsecured loan.
- In case one opts for an unsecured dropline overdraft, there is no requirement for any collateral.
- DLOD is a hybrid of both term loans and overdraft facilities.
- The sanctioned limit reduces the withdrawal limit monthly.
- The facility is only available for the current account. Thus, the bank credits only the amount to the current account.
- Every month, the bank charges interest on the amount withdrawn, however, calculating it daily.
- DLOD is the best facility for manufacturers, retailers, traders, and service providers.
- There are no kind of yearly renewal charges levied.
Read more about Overdraft Facility – Meaning, Advantage, and Significance, Here.
Who is eligible for the Dropline OD facility?
Any entrepreneur, proprietor, self-employed professional, a private company, or partnership firm will get access to the DLOD facility.
Understand the difference between overdraft facility and cash credit here.
What are the documents needed for the DLOD facility?
1. General requirements
KYC Documents of borrower and co-applicants
- Aadhar Card
- PAN Card
2. Statutory documents
In the case of Proprietary Firm
- Shop Act
- GST certificate
- Udyog Aadhar certificate
For a Partnership Firm
- Shop Act
- GST certificate
- Udyog Adhar certificate
- Partnership deed
In the case of a Private limited company:
- Certification of incorporation
- AOA
- MOA
3. Income documents
- Last 3 years Financials (audited)
- Last 3 years ITR
- Existing loans status
- 1-year Banking
Terkar Capital for DLOD Facility
For those seeking a dependable financial institution to access the Dropline Overdraft facility, Terkar Capital is the preferred choice. We are dedicated to facilitating Financial Instruments and will make sure you have a hassle-free experience in availing of the capital.
Our operational efficiency, coupled with a commitment to transparency, confidentiality, and professionalism, positions us as adept debt fund arrangers. Terkar Capital stands prepared to serve your financial needs promptly and effectively, ensuring satisfaction in every aspect of the process.
Learn in detail about an Overdraft facility.
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