A flexi personal loan is similar to a credit card, it is a flexible financial tool. Instead of receiving a lump sum payment, borrowers are given a pre-approved credit limit that they can use as needed. This strategy offers flexibility in borrowing and repayment, which makes it a great option for handling unforeseen costs or changing financial requirements. Since interest is only assessed on the amount utilised, it is a more affordable option than conventional personal loans.
What is a flexi personal loan?
A flexi personal loan provides a revolving line of credit up to a pre-approved limit. Within the parameters set by the lender, borrowers are at liberty to take out money as needed and pay it back at any time that is most convenient to them. A flexi loan only assesses interest on the borrowed amount and not on a full loan amount, unlike typical loans, which compute interest on the full loan amount. Because of its structure, it is a flexible and affordable way to deal with unforeseen costs or scheduled expenses.
Features of flexi personal loans
- Simple access to funds: As long as they remain below their approved credit limit, a borrower can draw cash as they need it.
- Flexible repayment options: The main amount may be repaid at any time depending on your financial situation.
- Multiple withdrawals: Several withdrawals can be made within the approved limit without extra charges.
- Lower interest rates: Only pay interest rate on the borrowed amount and for the period of time borrowed.
- No collateral required: Make use of this facility without pledging any assets as security.
What is the process for the flexi-personal loan?
An overdraft facility works like a flexible personal loan:
- The bank approves a pre-approved credit limit.
- Borrowers can withdraw any amount up to this cap at any time.
- Only the amount that is withdrawn, not the fraction that is not used, incurs interest.
- There are no restrictions on the utilisation of funds.
This facility minimizes interest expenses and provides the borrowers with flexibility to manage their money effectively.
Eligibility criteria for flexi-personal loan
- Employment type: Both self-employed individuals and wage earners are eligible.
- Key factors for lenders: Liabilities, security of employment or business, age, and income
- Credit score: With a credit score of 750 or better, the probability of acceptance will be significantly enhanced, and it is possible that more favourable rates will be secured.
Documents required for flexi-personal loan
The documents required for a flexi personal loan may depend from lenders to lenders, but some of the major documents are same in all the cases, which are listed below:
In conclusion, for someone seeking to have the best ease and flexibility in their money management, a flexi personal loan is just right. They help especially with handling unexpected crises such as, covering expected costs such as education or home renovation, lowering interest rates through prudent borrowing and repayment practices. To ensure proper use and avoid unnecessary debt, the borrower should thoroughly scrutinize the conditions, interest rates, and repayment options, as they generally consist of higher interest rates.
(Note: Raising a loan comes with its own risks. So, due caution is advised)
