A Personal Loan Overdraft Facility is a flexible credit option that lets you withdraw funds up to a pre-approved limit as needed, instead of receiving a fixed lump-sum like a traditional loan. Interest is charged only on the amount you use, and it’s typically calculated on a daily reducing balance basis. This makes it ideal for short-term or unpredictable expenses such as medical emergencies, business needs, or working capital.

Both salaried and self-employed individuals can apply for this facility. Most banks require a minimum CIBIL score of 700, proof of stable income, and in some cases, an existing relationship like a salary or savings account. Some lenders also offer secured overdrafts against fixed deposits or mutual funds.

Interest rates for overdraft facilities range between 10% to 18% per annum, depending on your credit profile and the lender. The borrowed amount can be repaid partially or in full anytime, and once repaid, the limit is reinstated — allowing revolving usage.

There are usually no fixed EMIs, but discipline is crucial as overuse or delays can affect your credit score. Overall, a personal loan overdraft offers high flexibility, quick access, and can be more cost-effective than credit cards or traditional loans when used wisely.