An unsecured overdraft gives your business a ready limit for day-to-day financial requirements — without collateral. Draw, repay and draw again, paying interest only on what you use.
An unsecured overdraft limit is sanctioned on the strength of your turnover, banking and repayment track, with no collateral. It works like a reserve: the full limit is available, but interest is charged only on the amount you draw and for the days you use it.
For businesses whose need for funds goes up and down through the month, an OD is usually cheaper than a term loan of the same size. Compare the two below.
No collateral or guarantor
Interest only on amount drawn
Draw and repay any number of times
Annual renewal
Ideal alongside a secured CC limit
Quick set-up for established businesses
Calculators built for overdraft
Know your numbers before the bank does
Overdraft vs term loan Pay for use
OD interest = limit × average utilisation × rate · Term loan: year-1 interest on the full amount (3-yr EMI loan)
You save with an overdraft (year 1)—
OD interest / year—
Term loan interest / year—
Indicative estimate using standard lending formulas and editable default rates. Final amount, rate and terms are decided by the lender after appraisal.
Eligibility
Who qualifies
Business Criteria
Established proprietorship, partnership or company
Consistent turnover and healthy bank statement
Profitable with ITRs and financials for 2 years
Track record Criteria
Clean repayment track on existing loans
No cheque bounces in recent banking
Good credit score of promoters
Documents
What you'll need
Photograph of all applicants
KYC: PAN card + Aadhaar / Passport / Driving Licence
Residence proof: Passport / Voter ID / Driving Licence / recent electricity or telephone bill
Office proof: GST registration / Udyam certificate / utility bill of the premises
Income proof: last 2 years ITR with computation of income and financials
Bank statement: last 6 months of the main business account
Constitution proof: MOA–AOA / partnership deed (for companies and firms)
Existing loans: repayment schedules / sanction letters of all running loans
Audited financials: last 2 years with audit report and all schedules
Bank statements: 12 months of all business accounts
GST returns for the last 12 months
Tip: use our document checklist builder to tick off what you have and send the pending list to us on WhatsApp.
Suitable for
When this loan is the right tool
Day-to-day expensesBusiness expansion without collateralSeasonal stock purchasesBridging payments
How it works
From first question to disbursal, in four steps
Check eligibility
Use a calculator or the 3-step check. No effect on your credit score.
Share documents
Our checklist tells you exactly what's needed — send it on WhatsApp or drop it at our office.
Ex-banker pre-check
Our in-house credit team reviews your file and selects the lenders most likely to approve at the best rate.
Sanction & disbursal
We follow up with the lender until the money is in your account — and stay for after-sales support.
FAQ
Unsecured Overdraft Limit: your questions answered
A business loan gives a lump sum repaid in EMIs from day one. An overdraft gives a limit; you draw only when needed and pay interest only on what's drawn.
No. An unsecured OD is sanctioned on turnover, banking and repayment track.
Daily, on the outstanding balance, and debited monthly.
Yes. You can deposit and withdraw freely within the limit.
Yes, ODs are reviewed annually on your latest financials and banking.
Businesses with fluctuating fund needs through the month — traders, distributors, service firms with irregular collections.
Yes. As your turnover grows, a secured CC limit against property usually gives a larger limit at a lower rate.
Regular usage within the limit and timely interest servicing builds your credit history.
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Last updated: November 2026 · Bhavya Agencies Pvt. Ltd.
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Terms & Conditions
Last updated: November 2026 · Bhavya Agencies Pvt. Ltd.
Our role
Bhavya Agencies Pvt. Ltd. facilitates loans from banks and NBFCs. We are not a lender. Sanction, rate of interest, fees, amount and terms are decided solely by the lender after its own appraisal.
Information on this website
Descriptions, eligibility criteria and calculator results are indicative and for general guidance. They are not an offer or commitment of credit.
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You agree to provide true, complete and current information and genuine documents. Misrepresentation may lead to rejection by lenders and legal consequences.
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Governing law
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Disclaimer
Last updated: November 2026 · Bhavya Agencies Pvt. Ltd.
Calculators
All calculators use standard formulas — EMI = P × r × (1+r)^n ÷ ((1+r)^n − 1), FOIR, LTV, DSCR, drawing power — with default rates you can edit. Results are illustrative estimates, not quotes.
Regulatory figures
References to RBI loan-to-value limits, prepayment rules, Delhi stamp duty and Income-tax deductions reflect our understanding at the time of writing and can change. Please verify with the lender, sub-registrar or your tax adviser.
Rates
Interest rates and charges vary by lender, product, profile and time. Any figure discussed is subject to the lender's sanction letter and Key Fact Statement.
Third-party names
Any bank or NBFC names mentioned are for information; their trademarks belong to them.
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Risk Disclosure
Last updated: November 2026 · Bhavya Agencies Pvt. Ltd.
Borrowing is a commitment
A loan must be repaid with interest on schedule. Missed or late EMIs attract penal charges, harm your credit score and, for secured loans, can lead the lender to enforce its security — including your property.
Floating rates
On floating-rate loans the rate can rise with the benchmark, increasing your EMI or tenure.
Secured loans
When you mortgage property, the lender holds a charge on it until the loan is fully repaid and the security is released.
Borrow what you can repay
Keep total EMIs within a comfortable share of income. Our eligibility tools show the upper limit lenders may allow, not the amount you should necessarily take.
Read the Key Fact Statement
Before signing, read the lender's sanction letter and Key Fact Statement, which state the APR, all fees and recovery terms.
Legal
Grievance Redressal
Last updated: November 2026 · Bhavya Agencies Pvt. Ltd.
Step 1 — Write to us
Email sandeep@bhavyaa.com or call 011-45123555 with your name, mobile and the issue. We acknowledge within 2 working days and aim to resolve within 15 working days.
Step 2 — Escalation
If unresolved, write to our Principal Officer, Mr. Sandeep Jain, at 4E/7, 3rd Floor, Jhandewalan Extension, New Delhi – 110055.
Lender-related complaints
For issues about sanction, rate, charges or recovery, you may also use the grievance channel of your lender as stated in its sanction letter.
RBI Ombudsman
If your lender does not resolve a complaint within 30 days, or you are not satisfied, you may approach the RBI under the Reserve Bank – Integrated Ombudsman Scheme at cms.rbi.org.in.
