Decoding Dropline Overdraft: Your Ultimate Guide to L&T Finance SME Loans

L&T Finance

10 Nov 202308:52

Summary

TLDRThis video script introduces the dropline overdraft facility by Lant Finance, offering customers flexibility in loan utilization. Amit, a representative, explains the product's features, including a 10-year fixed period with monthly limits, prepayment options, and interest charged only on the utilized amount. He also details the process of calculating monthly limits, making part payments through self-help portals or NEFT/RTGS, and additional withdrawals. The script emphasizes ease of use and the benefit of managing cash flow effectively.

Takeaways

🏦 The 'Dropline Overdraft' facility is provided by Lant Finance to offer flexibility to customers in managing their loans.
💡 Interest is charged only on the amount utilized by the customer, not on the entire sanctioned amount.
📅 There is a fixed 10-year period for the dropline overdraft with monthly limits set at the time of disbursement.
🔄 Customers can make any number of prepayments or withdrawals up to the available limit without additional charges from Elant Finance.
💻 Monthly limits are reduced each month following the schedule provided at the time of disbursement.
📉 If the customer's utilization is less than the limit, the repayment amount will vary accordingly, reflecting the actual usage.
💰 The customer can deposit additional funds into the dropline overdraft at any time to reduce the outstanding balance and lower the interest charged.
🔢 The repayment for the next month is calculated based on the utilized limit, with interest paid only on that amount if it's less than the limit.
📝 For higher utilization than the dropline OD limit, the repayment includes both principal and interest amounts.
🖱️ Part payments can be made through the self-help portal or via NEFT/RTGS, with instructions provided for both methods.
📞 Customer care is available to assist with any issues, such as deposits not being reflected in the account.

Q & A

What is the dropline overdraft facility?
-The dropline overdraft facility is a product that allows customers to withdraw or prepay at their convenience, with interest charged only for the amount utilized, not the complete sanctioned amount.
What are the features of the dropline overdraft product?
-The features include a fixed 10-year period, monthly limits set at the time of disbursement, the ability to make any number of prepayments or withdrawals up to the available limit, and no charges for withdrawal or part payment by Elant Finance.
How are the monthly limits for the dropline overdraft calculated?
-The monthly limits are set at the time of disbursement and represent the maximum amount that can be utilized each month. These limits decrease each month as per the schedule provided at the time of disbursement.
If a customer doesn't use their entire limit, will the limits still be lowered each month?
-Yes, the limits will still be lowered each month regardless of whether the customer has utilized the full limit or not.
How is the repayment amount calculated each month for the dropline overdraft?
-The repayment amount varies based on the customer's usage. Interest is calculated daily on the utilized limit, and the principal is paid at the end of the month only if the utilization is higher than the limit.
Can a customer deposit money into their dropline overdraft facility?
-Yes, customers can deposit money into their dropline overdraft facility at any time, which will adjust against the outstanding principal, freeing up the utilization limit and reducing the interest charged.
How is the repayment for the next month calculated if the customer's utilization is less than the dropline OD limit for the month?
-If the utilized limit is less than the dropline OD limit for the month, the customer only needs to pay the interest on the limit utilized.
What happens if the customer's utilization is higher than the dropline OD limit?
-If the utilization is higher than the dropline OD limit, the repayment will include both the principal and interest amounts.
How can a customer make a part payment into their dropline overdraft account?
-Customers can make part payments through the self-help portal by entering their loan account number and OTP, or through NEFT or RTGS by adding a beneficiary in their bank for repayment through ECMS or virtual account.
What should a customer do if their deposits are not reflected in their account?
-If deposits are not reflected, the customer can contact the customer care center for assistance.
How can a customer make an additional withdrawal from their dropline overdraft account?
-Customers can use the self-help link, select 'SM loan', click on 'additional withdrawal', enter their loan account number and OTP, and then enter the withdrawal amount and submit.

Outlines

00:00

🏦 Introduction to Dropline Overdraft Facility

This paragraph introduces the Dropline Overdraft facility offered by the Lant Finance team. Amit, a representative from Lant Finance, explains the flexibility of the product to a customer who has recently received loan sanction. The customer learns about the ability to withdraw or prepay at will, with interest charged only on the utilized amount rather than the total sanctioned amount. Amit provides basic details about the product features, including a fixed 10-year period with monthly limits, no charges for withdrawals, and the potential for transaction charges by the payment gateway partner.

05:03

📈 Understanding Monthly Limits and Repayment Calculation

In this paragraph, the customer inquires about the calculation of monthly limits and the repayment process. Amit clarifies that monthly limits are set at disbursement and decrease each month regardless of utilization. He provides an example with a 25 lakh rupee loan over 48 months at a 15% interest rate, explaining how the installment and available balance change with each payment. The customer learns that if they don't use their limits, they will still be lowered monthly, but they will only be charged interest for the utilized limits. Amit also explains how to make part payments through the self-help portal and NEFT/RTGS, and how to handle additional withdrawals and deposits. The customer is assured that the repayment amount will vary based on usage, and the interest is calculated daily on the utilized limit. Finally, Amit addresses potential issues with deposit reflection and directs the customer to the customer care center for assistance.

Mindmap

Keywords

💡Dropline Overdraft

Dropline Overdraft is a financial product that allows customers to withdraw or prepay funds at their convenience, enhancing flexibility. In the video, it is presented as an option for a customer who has received a loan sanction but may not use the entire amount. The interest is charged only on the utilized amount, not the total sanctioned amount, which is a key feature of this product.

💡Loan Sanction

Loan sanction refers to the approval of a loan application by a financial institution. In the context of the video, the customer has received a loan sanction from Lant Finance, which is the starting point of the discussion about the dropline overdraft facility and how it can be beneficial for managing cash flows.

💡Prepayment

Prepayment in the financial context means paying off a debt or loan before its due date. The video explains that with the dropline overdraft facility, customers can prepay at their convenience, which is one of the flexible features of this product.

💡Interest

Interest is the cost of borrowing money, usually calculated as a percentage of the principal amount. In the video, it is clarified that interest is charged only for the amount utilized by the customer, not the entire sanctioned amount, which is a significant advantage of the dropline overdraft product.

💡Monthly Limits

Monthly limits are the maximum amounts that can be utilized by the customer each month as per the terms of the dropline overdraft facility. The video script explains that these limits are set at the time of disbursement and decrease each month, affecting the customer's repayment schedule.

💡Disbursement

Disbursement refers to the release of funds from a financial institution to a borrower. In the script, the disbursement date is mentioned as the starting point for the loan repayment, and it is when the initial monthly limits for the dropline overdraft are set.

💡EMI (Equated Monthly Installment)

EMI is a fixed amount paid by a borrower to a lender at the end of each month until the loan is fully repaid. The video uses the term to explain the repayment structure of the loan, which includes both principal and interest components.

💡Part Payment

Part payment is a partial repayment of a loan or debt. The video script describes how customers can make part payments through the self-help portal or NEFT/RTGS, which can adjust against the outstanding balance and affect the monthly limits and interest charged.

💡Self-Help Portal

A self-help portal is an online platform that allows customers to perform various transactions related to their loans, such as making part payments. The video explains the process of using the self-help portal for part payments in the context of the dropline overdraft facility.

💡NEFT/RTGS

NEFT (National Electronic Funds Transfer) and RTGS (Real Time Gross Settlement) are electronic funds transfer systems used in India. The video mentions these as methods for making part payments into the dropline overdraft account, emphasizing the ease of transaction.

💡Customer Care

Customer care refers to the support services provided by a company to assist customers with their inquiries or issues. In the video, the customer is informed that they can contact the customer care center if they encounter any problems, such as deposits not being reflected in their account.

Highlights

Introduction to the drop line overdraft facility provided by Lant Finance.

Explanation of how a customer can utilize the drop line overdraft for flexibility in loan utilization.

Interest is charged only for the amount utilized, not the complete sanctioned amount.

Features of the drop line overdraft product include a fixed 10-year period with monthly limits.

Any number of prepayments or withdrawals can be made up to the available limit each month.

The principal amount reduces with each EMI payment date.

No charges by Elant Finance for withdrawal or part payment.

Transaction charges may apply from the payment gateway partner.

Monthly limits are set at disbursement and decrease each month.

Example provided to illustrate how the drop line overdraft works with loan repayment.

Interest is calculated daily based on the utilized limit.

Repayment amount varies each month based on the customer's usage.

Depositing money into the drop line overdraft facility adjusts the balance and reduces interest.

Repayment for the next month is calculated based on the utilized limit.

Instructions on how to make part payments through the self-help portal.

Details on part payment through NEFT or RTGS.

Process for additional withdrawals using the self-help link.

Customer care support for issues with deposits not being reflected.