A working capital limit (OD) is the total fund-based limits that a company receives from one or more financial institutions to meet its working capital requirements. It also includes any working capital term finance limits. ODs are available even if the account balance is zero and can be secured or unsecured.

A dropline overdraft (DLOD) is a long-term overdraft loan that allows a customer to overdraw from their current account up to a predetermined limit. The bank agrees on the DLOD limit, which is credited only to current accounts.

A cash credit (CC) limit is a fund-based limit that a bank gives a company to meet its working capital requirements. A CC limit is granted against the hypothecation of stock such as raw materials, work-in-process, finished goods, and stock-in-trade.

A term loan is a type of loan that provides a lump sum of cash to a borrower for a set period of time and interest rate. The borrower agrees to pay the lender a fixed amount over a certain repayment schedule with either a fixed or floating interest rate.

Term loans are mostly used by businesses to finance their capital expenditure and expansion needs. They can be secured or unsecured, depending on whether they require collateral or not.

Here are some other characteristics of term loans:

Drawings are usually made in one amount

Repayment is typically made by fixed monthly, quarterly or annual repayments

Term loans usually involve an unfixed (a.k.a. floating) interest rate that will add additional balance to be repaid

A term loan is very similar to a home mortgage