Dropline Overdraft


Say if I consider opting for dropline Overdraft facility from HDFC for the total granted amount of 70L with interest percentage of 10.5% and the reduction limit every year is 13%. My questions are -

  1. From the approved amount, if I take 50L in the first year itself - how much I have to pay per month? Is it interest only I have to pay or principal amount too? Please clarify.
  2. Say as mentioned in point 1 above, I consider using 50L for straight four years, then how the above said 13% downsizing limit will work every year. Considering the situation in which, at the end of first two years, after downsizing, I will be left with total 52L and in which 50L, I am already utilizing. Then how this downsizing will work for third year and so on. Do I still have to pay downsizing amount myself or it goes just as I mentioned in point 1 above.


Hi Karen,

Usually you need to pay interest and principal based on the amount drawn by you. Banks check whether you have fully drawn your limit or not, before charging interest. We suggest that you use HDFC bank’s dropline overdraft calculator for calculating the interest and principal you need to pay. You can find it on the HDFC bank website.

BB Expert