Can I Get a Loan on a Current Account?

Ever run into a situation where your business needs additional financial help? Maybe the festive season is coming, and you need to stock up on inventory or a long-term supplier suddenly demands advanced payment. Or perhaps your factory needs immediate maintenance before the monsoon season? As a business owner, encountering such stressful scenarios might be quite common.

Many business owners don’t realise they can quickly and conveniently access additional funds directly through their current accounts and get that much-needed financial boost. Keep reading to learn how to take advantage of these opportunities!

How to get a loan on a current account: Two relevant options

Many wonder how to get a loan on current accounts and overcome financial crises in business. The options available are overdraft facilities and business loans. Here is a detailed overview:

1. Overdraft facility

A current account usually comes with an overdraft facility that lets you withdraw money even if your account balance is zero, but only up to a pre-approved limit. It acts as a short-term current account loan that you can use to cover temporary financial gaps.

Overdraft facilities also have specific terms and conditions, such as an overdraft limit, interest rates, and charges or fees. The interest is calculated on the amount withdrawn from the total sanctioned limit and the duration of the overdraft.

Benefits of an overdraft facility

Avoid multiple loans

Every overdraft facility comes with a limit based on your creditworthiness and the bank’s policies. This means you have 24/7 access to funds that you can use anytime. Hence, there’s no need to apply for a new loan each time you need funds.

Pay interest on what you use

Borrow as needed without committing to a long-term loan. Also, pay interest only on the amount utilised, not on the entire sanctioned limit.

Enhanced credit management

Having access to ready-to-use funds means you can keep your business running smoothly despite any cash flow issues.

The amount you borrow through the overdraft facility must be repaid with applicable interest rates. You can open an IndusInd Bank Indus Premier Current Account to enjoy a high overdraft limit at a competitive rate. This makes your borrowing experience affordable and worry-free.

Besides this quick borrowing option, you get additional benefits like:

• A 100% digital current account opening process
• Grouping of accounts facility
• Transparent fees and no hidden charges
• Option to customise your account number
• Premium digital banking services

Open a current account with IndusInd Bank today and give your business the financial boost it deserves!

2. Obtain a business loan for bigger needs

If your financial needs exceed what an overdraft can cover, you can apply for a business loan online. This might be necessary for situations such as purchasing costly equipment, settling large business transactions, renovating your workspace, or covering major cash flow gaps.

Benefits of business loans

Higher loan amount

Get substantial funds that can be used to purchase inventory for your grocery store, expand your garment shop, or prepare for peak seasonal demands like festivals.

No collateral

Banks, like IndusInd Bank, offer business loans without any collateral. You can secure instant financing without pledging any assets.

Quick processing and disbursal

Apply for a business loan online and complete all the formalities from your home. Post approval, funds are disbursed to your bank account instantly.

Structured repayment

This current account loan typically has a structured repayment plan. Most banks let you pay fixed Equated Monthly Instalments (EMIs) at a predetermined interest rate, as outlined in your loan agreement.

Key takeaways

Getting a loan on current accounts is possible through options like overdraft facilities and business loans. An overdraft facility helps you manage short-term financial needs instantly, anytime, anywhere, with interest charged only on the utilised portion. A business loan offers a lump sum amount with fixed repayment terms. This may work well for large expenses and long-term financial strategies.

Always plan for repayment in advance, as both overdrafts and business loans accrue interest. To keep your repayments affordable, open a current account with a bank that offers competitive rates and flexible terms on these loan options.