An overdraft facility allows you to withdraw funds from a fixed line of credit (sanctioned loan amount) as and when you need and deposit funds in the same. Thus, you can withdraw and repay as per your convenience. This makes an overdraft facility (OD Facility) one of the most desired credit options and saves interest costs for the borrower.
The Bajaj Finserv Flexi Personal Loan offers similar benefits.
Features of overdraft facility
An overdraft facility allows account holders to withdraw more money than their account balance. Following are some of the key features of overdraft loan for salaried:
- Flexibility in borrowing
- Instant access to funds
- Interest is charged only on the amount withdrawn
- The repayment facility is tailored to individual needs
- Nil prepayment charges
- Minimum Monthly Payment
- Joint borrowers are allowed on Overdraft
Overdraft limit for salaried individuals
The overdraft limit for salaried individuals is determined by various factors, including the individual's monthly income, credit history, and banking relationship. Generally, banks offer overdraft limits that are a percentage of the individual's monthly salary, ranging from one to three times the salary amount. The overdraft facility allows salaried individuals to withdraw funds exceeding their account balance, providing a financial cushion during emergencies. It's important to note that interest is charged on the overdraft amount utilized, and terms and conditions vary among banks. Prospective borrowers should carefully review and understand the overdraft terms before availing such facilities.
How overdraft facility work?
An overdraft facility allows account holders to withdraw funds exceeding their account balance, up to a predetermined limit set by the bank. It acts as a short-term loan, offering flexibility and quick access to additional funds. With a personal loan overdraft facility Interest is charged only on the borrowed amount, making it a convenient solution for managing temporary financial gaps.
Types of overdraft facility
Below are a few types of overdraft facilities:
- Authorised overdrafts
Authorised overdrafts are pre-approved by the bank, allowing account holders to withdraw funds beyond their balance up to the specified limit.
- Unauthorised overdrafts
Unauthorised overdrafts occur when withdrawals exceed the account balance without prior approval, often resulting in high fees and penalties.
- Overdraft against property
Obtain a credit line by leveraging the value of your property. Interest is charged only on the utilized amount, offering flexibility in managing cash flow.
- 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
A short-term credit facility linked to your salary account. Borrowers can access funds up to a predetermined limit, offering financial flexibility based on their income and employment status.
Bajaj Finserv Flexi Personal Loan
With the Bajaj Finserv Flexi Personal Loan facility, 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 utilised from the entire sanctioned limit. The Flexi Hybrid Loan variant comes with the added advantage of paying interest-only EMIs during the initial tenure. You can also use our personal loan EMI calculator to calculate your EMIs beforehand.
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.
Note: While we do not offer an overdraft facility, we extend similar benefits through our Flexi Personal Loans. You can read more about it here.