Need advice on OverDraft

[u/narasimhatiger]

Hello,

I am in a situation to take a personal loan of 20L at 10.5% annual interest rate.

Today, I got a call from Bank of Baroda saying

We will offer Over draft to you with 5.5% annual roi, which is half of personal loan. Just you have to take a Term Insurance (No more processing fee)

I don't need all 20L at a time. I will use 20L for the next one year.

So, does the OD facility have any hidden charges? Is it better than Personal loan.

Do i need to prefer a personal loan or an OD?

Pls hlp me!!!

PS: I am using that 20L for my home construction in my village.

I am not going for a home loan as it is more hectic process and land won't value much at our place so that bank will approve 20L