Current and Gearing Ratio

Hi, I need some clarification on this question

A company borrows $10,000 repayable in 5 years time and immediately uses the loan to repay its overdraft.
What will be the effect on the company gearing and current ratios?

i know the answer is increase both but when working for the Current Ratio would I be correct in saying Current assets increase because they borrowed cash and Current Liabilities (overdraft) will decrease because the overdraft is being paid?