Overdraft vs personal loan: which suits you?
Two ways to borrow, two different ways of paying. A quick comparison for salaried borrowers.
How they differ
A personal loan gives you a fixed amount upfront, repaid through fixed EMIs. An overdraft or credit line gives you a limit you can draw from as needed, and interest is generally charged on the amount you actually use. Terms vary a lot between lenders.
When an overdraft can fit
If your cash needs come in small, irregular amounts, a limit you can dip into may be more flexible than taking a large loan.
When a personal loan fits better
If you need a known amount for a specific purpose and want a fixed repayment schedule, a personal loan is usually simpler to plan around. Whichever you choose, compare rates, fees and the total cost.
This article is general information, not financial advice. Approval, rates and terms are decided by the lender.