What is Personal Loan Overdraft Facility?

What is Personal Loan Overdraft Facility?

Learn how an overdraft facility works, its features, and how an overdraft loan can help you manage short-term cash needs with flexible repayment options.
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What is an overdraft facility?

An overdraft facility lets you withdraw money beyond your account balance, up to an approved limit. You can use and repay the funds as needed, paying interest only on what you use. This flexible option helps manage your finances without taking a new loan every time.


Note: While Bajaj Finance Ltd does not offer an overdraft facility, we extend similar benefits through our Flexi Personal Loans.


Features of overdraft facility

An overdraft lets you spend more than what’s in your account, giving you a helpful financial backup. Here’s what makes it convenient for salaried people:


  • Borrow what you need, when you need it — no fixed limits on each withdrawal.
  • Funds available right away — no waiting around for approvals.
  • Interest only on money you use — saving you from unnecessary charges.
  • Repay at your own pace — no strict monthly EMI schedules.
  • No penalty for paying early — clear your dues without extra fees.
  • Just a small monthly minimum payment — keeps your account in good standing.
  • Can be shared with a co-borrower — borrow together if needed.
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Benefits of using an overdraft facility

    • Instant access to funds
      You can withdraw more than your available balance, giving you immediate financial support in emergencies or unexpected situations.
    • Interest only on utilised amount
      Interest is charged only on the amount you use, not on the total sanctioned limit—helping you save on unnecessary costs.
    • Flexible repayment
      There are no fixed EMIs; you can repay the borrowed amount partially or in full as per your convenience and cash flow.
    • No collateral needed
      Unsecured overdraft options are available, meaning you don’t have to pledge any assets or security to access funds.
    • Manages cash flow gaps
      Helps both individuals and businesses handle temporary shortages of funds, especially during billing delays or slow income periods.
    • Revolving credit
      Once approved, you can use the funds multiple times within the credit limit, without the need for reapplying each time.
    • Quick application
      Get instant overdraft approvals through a simple, digital application process with minimal paperwork involved.
    • Can improve credit score
      Responsible usage and timely repayments can improve your credit history and making it easier to get loans in future.
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Overdraft limit for salaried individuals

Overdraft facility is like a short-term safety net for salaried individuals who need extra funds. It depends on factors like your monthly income, credit history, your repayment capacity and how strong your relationship with the organisation. Before applying, make sure you understand the terms and conditions as it may differ.
 

How overdraft facility work?

An overdraft facility allows users to withdraw more funds than what is available in their account, up to a certain limit. It helps in handling unexpected expenses or short-term financial gaps. Interest is charged only on the amount used and not on the entire limit. It also offers flexible repayment options.

Read more: - How to apply for an overdraft
 

Types of overdraft facility

Below are a few types of overdraft facilities:

  • Authorised overdrafts
    In this account holders can withdraw more money than what's in their account within the specified limit.
  • Unauthorised overdrafts
    This occurs when withdrawals more than your specified limit without any approval. It can lead to penalties.
  • Overdraft against property
    Get an overdraft limit by using your assets or property as collateral.
  • Overdraft against fixed deposits
    Secure a line of credit using your fixed deposits as collateral. The overdraft limit is typically a percentage of the fixed deposit value.
  • Overdraft against insurance policy
    Utilise the surrender value of an insurance policy to avail of an overdraft facility. The policy serves as collateral, providing a convenient and quick financing option.
  • Overdraft against equity
    Leverage the value of your equity investments to secure an overdraft. The limit is determined by the market value of the stocks, offering liquidity without selling the holdings.
  • Overdraft against salary
    Based on your income and salary you will get overdraft facility to handle unexpected expense.


 

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Bajaj Finserv Flexi Personal Loan

With the Bajaj Finserv Flexi Loans, you can make multiple withdrawals from your loan limit whenever you need funds and prepay the loan at your convenience. The best part is that you need to pay interest only on the amount you have withdrawn from the entire sanctioned limit. The Flexi Hybrid Term Loan variant comes with the added advantage of paying interest-only EMIs during the initial tenure of up to 2 years. You can also use our personal loan EMI calculator to calculate your EMIs beforehand.


Check your eligibility for personal loan using just mobile number and OTP – 100% online process. 
 

Benefits of a Flexi Personal Loan

Take a quick look at the advantages of a Flexi Personal Loan

  • With a Flexi Personal Loan, you only have to pay interest on what you have withdrawn and not the entire sanctioned amount.
  • As the amount is pre-sanctioned, you can withdraw from it instantly.
  • You can use funds from the loan as per your requirement — for personal, professional, planned, or unplanned needs.
  • As this facility simplifies borrowing and repaying, you can use this to build a good credit history and boost your credit score.
     

To avail these benefits of the personal loan apply for the Flexi facility offered by Bajaj Finance Limited.
 

Also Check:

How to Apply for an OverdraftDifference Between Personal Loan and Personal Overdraft Loan
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Key offerings: 3 loan types

  • Flexi Hybrid Term Loan
  • Flexi Term Loan
  • Term Loan

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    You can pay interest-only EMIs for up to 24 months, after which, the EMI will consist of both, the principal and the interest. EMI is applicable only on the withdrawn amount.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Withdraw and prepay – no extra charges
    You can withdraw from your limit and prepay as many times as you want, without extra charges.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest on the loan amount you withdraw.

  • Flexi facility charges
    Flexi facility charges applicable based on your loan amount.

  • Amount disbursed in one go
    The entire loan amount is disbursed at the start.

  • Instalment pattern
    Fixed EMIs that cover both the principal and interest.

  • Flexi facility charges
    No Flexi facility charges.

Personal loan interest rate and applicable charges

Type of fee

Applicable charges

Rate of Interest per annum

10% to 31% p.a.

Processing fees

Up to 3.93% of the loan amount (inclusive of applicable taxes).

Flexi Facility Charge

Term Loan – Not applicable

Flexi variant - A fee will be deducted upfront from the loan amount (as applicable below)

  • Up to Rs. 1,999/- for loan amount less than Rs. 2,00,000
  • Up to Rs. 3,999/- for loan amount from Rs. 2,00,000 to Rs. 3,99,999
  • Up to Rs. 5,999/- for loan amount from Rs. 4,00,000 to Rs. 5,99,999
  • Up to Rs. 7,999/- for loan amount from Rs. 6,00,000 to Rs. 9,99,999
  • Up to Rs. 8,999/- for loan amount from Rs. 10,00,000 to Rs. 14,99,999
  • Up to Rs. 9,999/- for loan amount from Rs. 15,00,000 to Rs. 19,99,999
  • Up to Rs. 10,999/- for loan amount from Rs. 20,00,000 to Rs. 24,99,999
  • Up to Rs. 11,999/- for loan amount from Rs. 25,00,000 to Rs. 29,99,999
  • Up to Rs. 12,999/- for loan amount of Rs. 30,00,000 and above

*All the Flexi facility charges above are inclusive of applicable taxes

*Loan amount includes approved loan amount, insurance premium, and VAS charges.
Principal Holiday Facility Fees
  • Up to Rs.1999/- for loan amount less than Rs.2,00,000
  • Up to Rs.3999/- for loan amount from Rs. 200000 to Rs.399999
  • Up to Rs.5999/- for loan amount from Rs. 400000 to Rs.599999
  • Up to Rs.7,999/- for loan amount from Rs. 600000 to Rs.999999
  • Up to Rs.8,999/- for loan amount from Rs.10,00,000 to Rs. 1499999
  • Up to Rs. 9999/- for loan amount from Rs. 15,00,000 to Rs.19,99999
  • Up to Rs.10,999/- for loan amount from RS. 20,00,000 to RS.2499999
  • Up to Rs.11,999/- for loan amount from RS.25,00,000 to RS. 29,99999
  • Up to Rs. 12,999/- for loan amount of Rs.30,00,000 and above

Above charges are inclusive of applicable taxes & will be deducted upfront from loan amount

*(Loan amount includes approved loan amount, Insurance Premium & VAS Charges)

Bounce charges

Up to Rs. 1,200 per bounce.
“Bounce charges” shall mean charges for (i) dishonour of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason

Pre-payment charges

Full pre-payment

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
  • Flexi Term Loan (Flexi Dropline): Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.
  • Flexi Hybrid Loan: Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.

Part pre-payment

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part pre-payment.
  • Not Applicable for Flexi Term Loan (Flexi Dropline) and Flexi Hybrid.

*Foreclosure will be processed post clearance of first EMI

Penal charge

 Delay in payment of instalment(s) shall attract Penal Charge at the rate of up to 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount.

Stamp duty (as per respective state)

Payable as per state laws and deducted upfront from loan amount.

Annual maintenance charges

Term Loan: Not applicable

Flexi Term Loan (Flexi Dropline): Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount (as per the repayment schedule) on the date of levy of such charges.

Flexi Hybrid Loan: Up to 0.295% (inclusive of applicable taxes) of the total withdrawable amount during the initial tenure. Up to 0.295% (inclusive of applicable taxes) of total withdrawable amount during subsequent tenure.

Broken period interest / Pre-monthly Instalment interest

Method of recovery of "Broken Period Interest/Pre monthly instalment Interest" would be as follows:


EMI Date : 2nd

Scenario 1: If Loan is disbursed on 1st or post 10th of the month:

For Term Loan: BPI amount will be capitalised, i.e added to Principal amount on Due date / Deducted from disbursement
For Flexi Loans: BPI amount will be capitalised, i.e added to Principal amount on Due date / Added to first instalment

Scenario 2: If Loan is disbursed between 3rd and 10th of the month:
First instalment will consist of interest for actual number of days

Note: Additional cess if any, will be applicable to all charges according to state law.

*Terms and conditions apply.

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Bajaj Finance Limited has the sole and absolute discretion, without assigning any reason to accept or reject any application. Terms and conditions apply*.