Flexi Loan Vs Flexi Personal Loan: Difference Between Them You Need to Know

Getting a personal loan might be beneficial when you want money for a medical operation, a wedding, a trip, or other private purposes. Many lenders now provide quick loans with low-interest rates. All you have to do is assess your objectives, choose your loan amount, & pay set EMIs for the duration of the loan.

What happens if you don’t repay your loan in full? You will still be required to make sizable EMI payments for the amount borrowed.

Some loans come with overdraft protection and flexible repayment alternatives. These loans are known as flexi loans. Let’s examine their distinction from term loans.

What Exactly is a Personal Loan?

A personal loan is a sort of loan for which there is no need for security or collateral. A user with a minimal amount of paperwork may be eligible for this loan.

Once the loan has been accepted, the borrower can use it as they see fit. Like with any other loan, the user must return the money following the terms & conditions established with the bank. With easy calculations, the payback may be completed in a few months to a few years.

As was before said, flexi loans for personal loans function like most loans. The user must submit the needed paperwork when applying for a loan. The bank will also do a creditworthiness assessment before making a loan offer.

What Exactly is Flexi Loan?

Loan applicants are permitted to take out a Flexi loan, often referred to as a Flexi Loan for Personal Loan, in the form of an overflow or credit line facility, up to a specified ceiling. Only the amount utilised by the borrowers will be subject to interest assessment by the lender, not the whole amount granted.

The initial amount may be paid back to the lender when it is most suitable for the borrower. Yet, they are still responsible for making monthly payments of interest following the terms and conditions. Many individuals pick these financial options over personal loans & use Flexi loans in their place because of how convenient they are.

Differences Between Personal Loans and Flexi Loans

	Flexi Loan	Term Loan
Loan amount	The lender determines your credit limit, which you are free to use as required. As a result, when you request a loan, the money you receive is put into your loan facility. You are able to roam it at any time.	The lender pays your account in full for the approved loan amount.
Interest payment	You will only be liable for paying interest on the portion of your withdrawal that is below the credit limit set by your lender.	Interest fees will be applied to the whole loan amount.
Prepayment	Prepayments are allowed with no costs or low fees.	Whether you partly or completely prepay your obligation, prepayment costs are still due.
EMI structure	How much you pay in EMIs depends on the loan’s terms, duration, prepayment policy, & withdrawal amount.	You will be expected to pay a set EMI amount that consists of both principal and interest. You may also determine your EMI in advance by using a personal loan EMI calculator.

Advantages of flexible loans

• Liquidity

With a flexi loan, you may take repeated withdrawals from your authorised credit limit, ensuring you always have access to cash. Additionally, you will only be required to pay interest on the amount you withdraw, not the total.

• Cheap EMIs

Thanks to the flexible repayment choices, you only have to pay an EMI on the amount you have withdrawn. Your interest payments will decrease as a consequence. Your EMIs are much lower under this repayment plan than they are under fixed EMI plans.

• Online applications and prompt payment

A flexi loan is simple and fast to apply for. Visit the website of your favourite lender, determine your eligibility for a personal loan, complete an online application, you submit the necessary paperwork. Within a few days, your lender will authorise your loan.

• Simple to handle

Like a savings account, you can always withdraw online from your loan account. The same applies to making several prepayments online.

• No fees for prepayment

Without incurring any fees, you may pay back your loan in whole or in part whenever it’s convenient for you.

Benefits of Personal Loans

• Quick Approval

A personal loan takes far less time than a mortgage, although it still takes three to four weeks. The money is often sent to the bank the next day after everything is completed in a single day. They are thus recognised as one of the best financial choices for meeting urgent cash payment needs.

• No Security is Required

Individual loans are unsecured, which means the borrower is not obliged to provide any collateral in exchange for the loan. Personal loans are thus easier to get than cars, housing, and other loans.

• Creates a credit score

If you have a poor credit score or are new to the credit market, taking out personal loans and making on-time payments is a great strategy to boost your credit score.

Why is a Flexi loan superior to a regular personal loan?

Here are a few explanations as to why a Flexi loan might be preferable to traditional personal loans:

• Traditional online fast loans release the accepted loan amount in one lump sum. The amount of money you can spend is unrestricted. On the other hand, a Flexi loan has a borrowing cap that cannot be exceeded. You may withdraw money up to this amount. It gives you control over your debt and assures you that you only borrow what you need.
• A personal loan has a set term. Within that time, you must make EMI payments to the lender. You have access to a personal loan EMI calculator provided by IDFC FIRST Bank so that you may determine your monthly payments. Interest is likewise set and is applied to the total loan amount. Repayment options are more flexible with a Flexi loan.
• Flexi loans also allow interest-only EMI payments. You may use this tool to reduce your monthly expenditure by up to 50% while freeing up money for other costs. Since the EMIs cover principal and interest payments, they do not apply to quick personal loans. Therefore, flexi loans are highly versatile.

Conclusion

Flexi loans for personal loans offer a wide range of benefits and features. However, Flexi Loan will offer consumers two important benefits that will allow them to lower their EMI payments and give them a chance to make a prepayment without paying extra costs. People use flexi loans for personal loans and to reduce their financial obligations due to the wide variety of flexible options available. If someone wants a Flexi loan, they may look online or at their neighbourhood bank location for the best financial solution. Visit Piramal Finance for more information.