New Delhi, July 1 -- In today's rapidly changing economic conditions, borrowers are often tempted to choose between personal loans and overdraft facilities to facilitate their liquidity needs.

That is why knowing the key differences between the two is crucial. It will help aspiring borrowers make the right choice based on their individual financial needs, repayment capacity, long-term goals, and aspirations.

An overdraft is a flexible credit line linked to a current or savings account. It permits the account holders to withdraw more money than they have. The sum of money that can be withdrawn is permitted up to a pre-approved limit.

This facility is primarily designed to fill short-term financial gaps. It offers instant access to funds...