A current account is a useful financial tool that simplifies your finances in multiple ways. Designed for individuals and businesses, it allows you to deposit, withdraw, and transfer funds 24/7 without restrictions. But what happens when you need additional funds? Perhaps you want to cover a large unexpected expense, grab a time-sensitive opportunity, manage a short-term cash flow gap, or open a new franchise.
Many wonder if they can secure a loan on their current account to meet these monetary requirements. Let’s explore this possibility.
Want to get a loan on a current account?
There are two easy ways to obtain credit through a current account – an overdraft facility and a business loan.
1. Overdraft facility
The overdraft facility allows you to overdraw money even if your account balance drops to zero. The bank pre-sanctions a limit based on your financial stability, balance in the account, creditworthiness, age of account with the bank, loans, default, etc. It serves as a short-term loan, and you are charged interest on the sum you overdraw.
Let’s say your current account has a balance of ₹10,000, and your bank offers an overdraft limit of ₹50,000. This means you can withdraw up to ₹60,000. If you withdraw beyond the ₹10,000, say ₹40,000, you would have utilised ₹30,000 of your overdraft limit. You will pay interest on the ₹30,000 you have overdrawn.
Open a current account with a bank that offers a high overdraft limit at a competitive rate so that your experience stays affordable and worry-free. Besides, you should also look for customised features, lifestyle privileges, and exclusive benefits that can enhance your entire banking experience. The IndusInd Bank Indus Premier Business Current Account offers all these benefits.
Look at the benefits of the IndusInd Bank Indus Premier Business Current Account:
● 100% digital application process: Complete the current account documentation and relevant formalities from the comfort of your home or office. Rest assured, the current account eligibility criteria are easy to meet.
● Customisable account numbers: Choose a unique account number with the “My Account, My Number” feature.
● Free cash deposits: Deposit up to 8 times the previous month’s balance or ₹10 lakh, whichever is higher, at no additional cost.
● Interest on surplus funds: With the auto-sweep feature, any surplus funds are automatically transferred into linked fixed deposits. This helps you enjoy higher rates on the unused funds and earn passive income.
● Free online transactions: Utilise RTGS, NEFT, and IMPS transactions at no cost.
● Free cheque facilities: Get 100 cheque leaves per month absolutely free.
● Doorstep banking: Enjoy hassle-free cheque pickup and cash delivery/pickup right to your location.
Open a current account today without branch visits!
Have bigger financial needs? Obtain a business loan online
For bigger financial demands that an overdraft can’t handle, apply for a quick business loan online. This option of borrowing can help you manage substantial expenses like purchasing inventory, upgrading equipment, expanding operations, hiring staff, or covering marketing costs.
Key benefits of a business loan for current account holders are:
● Complete all the application processes digitally
● No need to provide collateral
● Quick approval and instant disbursement
● Borrow any sum between ₹2 lakh to ₹20 lakh
● Affordable interest rates keep your Equated Monthly Instalments (EMIs) manageable
● You pay fixed EMIs at a predetermined interest rate
● No need to provide GST if you borrow up to ₹5 lakh or less
To sum up
While you cannot get a direct loan against current accounts, they offer other useful credit solutions, such as overdrafts and business loans. Overdrafts help you manage short-term financial needs, such as unexpected expenses or cash flow gaps. A business loan is more suitable if you want higher loan amounts, affordable rates, and fixed EMIs. In simple words, overdrafts are best for immediate, short-term borrowing, and business loans are more suited for structured, long-term financing, both of which become easily accessible if you have a current account with a reputable bank in place.
