Drop-line Overdraft is a facility granted to the customer by the financial institution where businesses can overdraw from their current account up to a limit that is agreed upon by the banker. Overdraft is one of the most efficient forms of borrowing as one needs to pay interest only for the amount of money withdrawn. The dropline overdraft is almost similar in all the cases except in new cases as there is the availability of the limit.
This withdrawal limit reduces each month from the limit which is sanctioned. The calculation of the Interest rate is done on a daily basis and it is charged at the month’s end. You will be charged only for the amount used, you can always park your funds in a virtual account whenever funds are not in use.