OD Facility
- Collateral-Free Loans : These unsecured loans are offered without collateral or security. However, before sanctioning the loan, the banks check your credit report and score, age and income over the past few years.
- Reducing Interest Rate : The rates of interest on the OD facility are fixed, which implies that the rates of interest remain constant across the tenure. The rate of interest on a OD facility is around 13-30% reducing a year.
- Flexible Repayment Tenure : OD facility come with flexible repayment tenure. This is a key feature of business loans that makes them an attractive funding option for businessmen.
- Loan Amount : An individual can avail of a maximum OD facility of up to Rs 2 Cr. provided he has a good credit score and a steady source of income. Banks check the financial credibility of the borrower before sanctioning the OD facility.
- Zero Paperwork : You can also avail of OD facility online by visiting the website of bank or through the mobile banking apps of the bank. You can also avail of OD facility from online loan aggregators. Online OD facility require minimum documentation and can be uploaded and submitted for verification.
- Fast Processing : Once you submit the documents, banks scrutinize them and approve the OD facility. The loan approval is followed by the disbursal process. Expect fast processing of the OD facility.
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Eligibility Criteria for OD facility
OD facility can be availed by self-employed, limited and private liability companies, manufacturers and services providers. The banks have certain eligibility criteria that must be fulfilled by the applicant. Loans are easily approved without wasting much time.
- The applicant must be 21 years to 70 years of age.
- The applicant must have run the business for the last 1 year.
- The annual business turnover must be Rs 10 Lakh.
- Show the last 3 years' Income Tax Returns filed for higher loan amount and best rate.
- The business partner can sign the OD facility as a co-applicant. This helps you avail of a OD facility at a lower interest rate.
Who can avail of a OD facility?
- Individuals
- Startup enterprises
- Retailers, Artisans, Traders
- MSMEs
- Private and Public Limited Companies
- Closely Held Limited Companies
- NGOs, Co-operative Societies and Trusts
- Self Employed individuals like doctors, architects, CAs, designers ect, CS, CMS, Services Provider.
Documentation for OD facility
The list of documents required for a OD facility to be submitted varies based on type of business entity. Submit the following documents to begin with the loan process:
- ITR for the past 2-3 years
- ALL Current/CC Bank Account Statement for the last 12 months
- Photocopy of PAN Card
- Address Proof for Residence such as Voter Card, Passport, Aadhaar Card, Telephone Bill, Electricity Bill
- Address proof for Business such as the Telephone Bill or Electricity Bill
- Last Financial Year's provisional Financials and future year's projections.
- Company's business profile on the letterhead
- 2 photographs of promoters and property owners.
- Sanction letter and Repayment schedule of existing loan
- GST registration certificate and GST returns of latest 2 years.
- D-Vat/Sale tax registration copy
- Udhayam Aadhaar registration certificate
- Rent agreement copy of factory and residence (if property is rented)
- Business Continuity proof of 3 years (3 years old ITR/Company registration etc)
- Company PAN Card, Certificate of Incorporation, MOA, AOA, List of Directors, and Shareholding pattern for Pvt Ltd companies
- Partnership Deed, Company pan Card for Partnership Companies