Flexi Overdraft vs Term Loan: Which Saves You More?

A Flexi Overdraft (Flexi OD) provides a sanctioned credit limit you can dip into anytime. Interest is charged only on the utilised amount.

When Flexi OD Wins - Irregular cash flows (consultants, contractors) - Working capital with seasonal cycles - Bridge finance for receivables

When Term Loan Wins - Lump-sum expense (wedding, education) - Predictable repayment helps with planning - Generally lower headline rate

Real Example On ₹10 Lakh limit, if you use ₹4 Lakh for 4 months only, Flexi OD interest may be 40-60% lower than a 5-year term loan.