Loan vs overdraft

Dear Experts,

kindly advise me on the following: I have few FDs in bank and approached them for granting me funds against the FDs, being the easiest thing to get a loan in less than 2 hours. the bank created an OD a/c in my login with the balance created which I can draw or transfer. earlier they created a loan a/c against FD. both cases it is 1% higher than the FD interest rate. I could not understand the difference between OD and loan when both are looking same to me.

thanks

GR Babu