What is Overdraft Facility/ Flexi Personal loan, and how is it different from a personal loan?

Nowadays, one has so many options to take credit from rather than depending on friends and family for it. One can take out money from their credit card, avail personal loan if the amount is huge and you want longer tenure and then there is an OD facility one can make use of. While everybody knows the process of credit cards, let’s know more about Flexi loans or Bajaj OD Loan as it is getting more popular due to various reasons. 

Just like a Bajaj personal loan, a Flexi personal loan or Bajaj OD Loan is also an unsecured loan and not secured against an asset like your home or car. One can easily apply for this loan via the official website of a bank, and within moments you will get an answer on that too. To be eligible for a personal loan, you should have a decent CIBIL score. In case you have a poor CIBIL score, your loan application may get approved on other factors such as your job profile, showing other sources of income, etc. Let’s discuss more Flexi loans down below: 

For the unversed, what is a Flexi personal loan? 

A Flexi personal loan is very much similar to your standard personal loan. An overdraft facility allows you to withdraw funds as and when the need arises. Moreover, under this option, the repayment is also easy as one can repay what they borrow at their convenience. However, it comes with a capping on the cash outflow where you can borrow funds up to a pre-approved cash limit as sanctioned by your lender. One can also avail of this kind of loan through Bajaj OD Loan under their unsecured Flexi personal loan. 

Main Features of Flexi Personal Loan

  • Whenever you need funds, you can make multiple withdrawals from your loan limit. 
  • Allows you to part-prepay as per your financial flexibility
  • Only need to pay interest on the amount you utilize from the entire loan amount the lender has sanctioned to you. 
  • Bajaj OD Loan allows you to withdraw and pre-pay as many times as you wish within the repayment window
  • Both salaried and self-employed individuals can avail of Flexi personal loan or Bajaj OD loan

There are many benefits of choosing Flexi Loan. One only has to pay interest on what they use and not the entire amount that is sanctioned to you by the lender. As the amount is pre-sanctioned, you can borrow from the bank or financial institution instantly, irrespective of the fact you are salaried or self-employed. Lastly, there are no restrictions on end-use. Hence, you can use funds as per your requirement or need. 

How does the Flexi Personal Loan Usually work?

Usually, under this type of loan, the financial institution pre-approves your loan amount, and the requested amount is deposited into your loan account. After that, the individual is free to withdraw the funds as and when they need them, provided s/he stays within the credit limit. One of the best parts about this type of loan is the lender calculates the interest only on the amount you have withdrawn from your loan account. That means the amount that you haven’t used or withdrawn won’t accrue any interest. 

How is Flexi Personal Loan Different from a Regular Loan? 

  • Unlike a Bajaj personal loan, a Flexi Loan or Bajaj OD Loan is a pre-approved loan. The loan amount is disbursed into the account instantly, thus, making funds readily available when the need arises. 
  • Since the amount comes with a pre-approved facility, one doesn’t require any additional paperwork or documentation to get the loan approved. 
  • A Bajaj personal loan is sanctioned to you based on your income and your repayment capacity, and due to this, the amount sanctioned could be higher. This isn’t the case with the OD loan. For example, if the amount sanctioned to you is Rs. 5 lakh, you can only apply for a loan within this cap only.
  • In a Bajaj personal loan, the prevailing interest rate is charged on the whole amount whether you use it wholly or not. This isn’t the case with the OD loan; the interest will only be charged on the amount you withdraw. Moreover, the interest charged on loan is more nominal than on a traditional personal loan. 
  • Once the lender has sanctioned you the limit, you can withdraw from your OD loan as many times as you need without making a new application every time there is a requirement. In the long run, it helps you save a lot of time. This isn’t the same with a Bajaj personal loan. In case you use up your whole personal loan amount, you have to go through the documentation process again to get the new loan amount sanctioned to you. 

A Flexi loan allows you to repay the principal amount as per your flexibility, and thus, you can manage your income accordingly, but with the personal loan, the EMI has to be paid on time or else you will be defaulting on it, which further comes with charges.


It has become very easy to avail of personal loans considering the attractive interest rates the lenders are offering. All it requires from the individual side is to evaluate your goals and decide on the loan amount you want and then pay the fixed EMI throughout the tenure until the loan amount is repaid. However, there could be chances that you do not use your borrowed amount completely? Then why the interest rate on the full amount? For those people, a Flexi loan can help you out. 

Just like a personal loan can be a saviour during financial emergency crises. Similarly, a Flexi loan too can also be your saviour. It can be utilized for any personal reason, be it medical emergencies or wedding expenses. In case of emergencies, a Flexi loan can be of great help as it allows you to withdraw the desired amount as and when you want to without going through the hassle of documentation, provided it remains within the upper-cap limit. But like with everything else, do check the lender’s credibility and not fall for the marketing gimmicks. 

Also Read: Dedicated Truck Driver.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button