Overdraft vs. Personal Loan: Which is better for urgent funds?

• Overdraft (OD) and Personal Loan (PL) are options for urgent financial needs, differing in nature, cost, flexibility, and risk.
• OD is a flexible credit facility where interest is paid only on the amount utilized, with no fixed EMIs, ideal for uncertain or recurring expenses.
• PL provides a fixed sum repaid in fixed EMIs over a set period, suitable for planned, larger expenses like home repairs or weddings.
• OD offers flexibility and interest only on used funds, while PL can strengthen credit scores with timely repayments and provides a lump sum for big costs.
• Choose OD for unpredictable needs and cash flow management; opt for PL if expenses are planned and you can manage fixed EMIs.

Why It Matters: Understand which financial tool best suits your urgent money needs.