What is an Overdraft Gold Loan?

What is an Overdraft Gold Loan?


What is an Overdraft Gold Loan?  

An Overdraft Gold Loan is a flexible credit facility where you pledge gold ornaments as collateral and receive an overdraft limit instead of a lump-sum loan. Unlike a regular gold loan with fixed EMIs, this facility allows you to withdraw funds as needed within the sanctioned limit and pay interest only on the amount utilized. It’s ideal for individuals and businesses seeking liquidity without the burden of fixed repayments. 

Key Features  

  • Flexible withdrawals up to the approved limit. 
  • Interest charged only on the utilized amount. 
  • Revolving credit facility for repeated use during tenure. 
  • Quick access to funds without selling gold. 
  • Competitive interest rates backed by secured collateral. 

Benefits  

  • Cost-effective borrowing with interest savings. 
  • Perfect for managing irregular cash flow. 
  • No fixed EMI burden; repay anytime during tenure. 
  • Easy renewal options for continued access. 

Difference Between Regular Gold Loan and Overdraft Gold Loan  

Aspect  

Regular Gold Loan  

Overdraft Gold Loan  

Loan Disbursement  

Lump-sum amount credited upfront 

Credit limit sanctioned; withdraw as needed 

Interest Calculation  

On entire loan amount 

Only on utilized amount 

Repayment Structure  

Fixed EMIs throughout tenure 

Flexible repayment; no mandatory EMIs 

Best For  

One-time fund requirement 

Ongoing or unpredictable cash needs 

Federal Bank offers Digi Gold Overdraft , a fully digital overdraft gold loan product designed for convenience and flexibility. With Digi Gold Overdraft, you can: 

  • Apply online without visiting a branch. 
  • Get instant approval and access to funds. 
  • Enjoy competitive interest rates and secure transactions. 
  • Manage withdrawals and repayments digitally. 

 

👉 Learn more and apply here: Digi Gold Overdraft by Federal Bank