The personal loan vs overdraft differences are simple to understand. Personal loans are best for long-term needs with fixed EMIs and tax benefits. On the other hand, overdrafts are better for short-term options where interest is charged only on the daily balance. Both are helpful, so you can choose which will be better for you depending on whether you want structured payments or a flexible credit line for smaller, quick-access needs.
What is the Difference Between Overdraft and Personal Loan?
The main difference between personal loan and overdraft is that a personal loan is a fixed, long-term borrowing repaid in instalments, while an overdraft offers short-term, flexible credit with interest charged on daily usage. Here are some more differences between the two:
Personal Loan |
Overdraft |
A personal loan has a fixed loan amount provided by the bank or lender |
In overdraft, cash is withdrawn beyond the current account balance |
Personal loans are long-term, suitable for larger, defined goals |
Overdrafts are short-term, best for immediate, smaller needs |
Monthly basis interest calculation is done in personal loans |
Daily basis calculation is done in personal loans |
Repaid via Equated Monthly Installments (EMIs) |
Repaid by depositing back into the bank account |
It takes longer to get approved, disbursed and requires application verification |
Via Overdraft, you can enjoy quicker disbursal, usually available within hours |
So these are the differences between overdraft loan vs personal loan.
Get up to Rs 10 Lakhs Instantly in Your Bank Account with NB InstaCash Read More:Which is Better Flexi Loan vs Personal Loan?
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Authors Of The Question
What is Difference Between Personal Loan and Overdraft?
Lalitha
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54 days
2024-10-30T19:39:23+00:00 2024-10-30T19:39:25+00:00Comment
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