OD vs Dhani Loan-What is the Difference and Which One Should You Choose?

Given that interest rates are on the rise, one must borrow responsibly. Personal loans and overdraft facilities are two of the popular choices that most people choose. When they have urgent financial needs, the majority of people think about personal loans, which they may now obtain by phoning dhani loan customer care. An overdraft account in banks can assist in addressing any quick financial needs without requiring the liquidation of other savings and investments.

The bank may allow the borrower to withdraw more money through the overdraft facility than what is available in their bank account. Based on the account holder’s balance, the bank determines the credit limit. The interest rate on dhani loan is based on both the size and the duration of the overdraft. In contrast, a personal loan is not secured and the interest rate is determined by your CIBIL score, ability to repay the loan, current earnings, etc. To decide which one to choose next when you are in desperate need of money, let’s extensively analyse both of these possibilities. By calling dhani loan customer care for personal loans, you could also choose to talk about your alternative possibilities.

Interest rate: One of the key advantages of an overdraft credit facilities is that it only pertains to the amount that is withdrawn, unlike personal loans, which charge interest beginning on the day the money is disbursed. In other words, interest is only charged on the amount drawn until it is paid back. Borrowers can choose to pay the principle component according to their available funds, but the interest component must be paid each month. Lenders typically demand higher interest rates than those for standard personal loans because of the greater repayment flexibility. The majority of lenders offer personal loans at set interest rates, which won’t alter regardless of how the interest rate system evolves.

Easy access to loan amount: The lender will examine the borrower’s history and verify their papers each time they apply for a personal loan. To find out if your application has been accepted, you could contact dhani loan customer care. In the event of an overdraft, the borrower may withdraw money many times within the same account up to the overdraft-allowed amount after completing just one piece of documentation. With overdraft loans, debtors are able to repeatedly withdraw any amount up to the authorised limit, pay it back, and then borrow more money as required.

Fast access: When requesting a personal loan, you must deal with a tonne of documentation. You need a good CIBIL score in order for your dhani loan to be approved. Every time you need money, you will be required to go through the same application process. Furthermore, you won’t get your hands on the cash until the loan has been granted. After opening an overdraft account, you can make a withdrawal within a few hours, most often within one business day. You don’t have to continuously open an overdraft account whenever you need money.

Flexibility: Personal loans don’t provide you a lot of room for manoeuvre. You are required to pay a certain EMI for the duration of the term, and the payments must be done on time. Many people can find this difficult, especially those whose monthly income varies. You are allowed to withdraw as much money as you need, according to the predetermined restrictions, using personal overdraft. You can divide up the payments however you’d like. You can choose to pay within days, weeks, or months, whichever is most convenient for you.

CIBIL Score Protection: If you frequently take out and repay personal loans, your CIBIL score will fluctuate frequently. Check bounces, for example, can lower your credit score, and if they happen frequently, it might be challenging for you to receive credit cards or loans in the future. By requesting an Overdraft Account from dhani loan customer care, you can avoid these problems. Your CIBIL score will increase because you will only have one debt under the overdraft option and will regularly pay it off.

Keep these things in mind when applying for an overdraft:

A personal loan can be obtained more quickly than an overdraft facility, but experts advise caution. The user of pre-approved overdraft account is in charge of keeping track of their borrowing and making payments on schedule. Unrestrained borrowing could trap you in a debt cycle since interest continues adding up.

A personal loan overdraft option should be chosen by borrowers who have the capacity to repay the dhani loan in full in a short period of time, such as three months. Others should adhere to conventional personal loans with fixed tenures and EMIs, such as term loans.

Borrowers must compare overdrafts based on interest rates, processing costs, and renewal costs. Compare the fees to those of alternative borrowing options that address fairly analogous needs. A loan with an overdraft may be useful for a self-employed person who requires cash flow flexibility.

An overdraft facility typically has a connection to the borrower’s bank account. The only part of an account that is charged interest is the portion that is withdrawn.

The sanctioned limit may be withdrawn by borrowers a number of times in any amount.

Compare the interest rates, renewal fees and processing fees of the overdrafts offered by multiple banks before selecting one.


The overdraft facility, which allows the borrower to withdraw money up to a predetermined limit above the account balance, is frequently linked to the borrower’s bank account. It is comparable to revolving credit, such as credit cards, where you can spend up to a set limit, settle your debt, and then have the credit limit renewed. Overdrafts are more practical than personal loans. If there is a potential that you might need several personal loans, it is preferable to use an overdraft account. However, you might think about a personal loan if you just want to take out dhani loan with a bigger principal amount and are prepared to pay it back over a longer period of time. Those who frequently have problems with short-term cash flow are most suited for the overdraft arrangement.

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