Guide to Choose the Right Loan

People may need money for different requirements such as to pay medical bills, travel, and other important expenses. Nowadays, many lenders offer fast personal loans with low interest rates. You just have to pick how much money you need and then pay it back in monthly instalments over time. Personal loans can help with all sorts of costs and have flexible terms and good interest rates. But what if you don’t need all the money at once and don’t want big monthly payments? That’s where a flexi loan comes in. It’s like having a line of credit where you can take out money whenever you need it. You can choose how and when you pay it back without strict deadlines. Learn more about personal and flexi loans to find which one best suits your needs.

What is a Personal Loan?

A personal loan is a form of lending where borrowers can access funds without providing any collateral. With hassle-free documentation, individuals can secure a loan, typically offered by banks or NBFCs. Once approved, borrowers have the liberty to utilise the loan amount for various purposes. Personal loans are flexible enough to meet a variety of financial demands, unlike speciality loans like vehicle loans that are designated for certain purchases.

Borrowers now find it easier to acquire quick personal loan offers due to the ease of 100% online applications and quick processing time. Terms and conditions, such as interest rates and repayment schedules, are determined prior and are the basis for how payback terms are made. Regular monthly payments, or EMIs, are determined by the loan amount, loan term, and current personal loan interest rates.

Discover your ideal loan option today on KreditBee

Apply Now!

What is a Flexi Loan?

Flexi loans are a substitute for people in need of rapid and flexible financial solutions because of their affordable interest rates and flexible payback terms. Because of its special feature to only charge interest on the amount used rather than the total amount permitted, this financial instrument is more affordable. It is thus a popular alternative loan solution. In India, both salaried and self-employed individuals are eligible to apply for Flexi loans online.

It is also known as a hybrid flexi personal loan, and with this financial tool, people may borrow money as needed and use it as a credit line or overdraft facility. In a hybrid flexi loan, a pre-approved set maximum limit is part of the borrowing procedure, giving consumers the flexibility to take out money as needed. Although borrowers are obligated to pay interest as per the conditions, they are free to repay the initial amount whenever they choose.

Flexi Loans vs. Personal Loans

Particulars Personal Loan Flexi Loan
Type This loan is directly disbursed to the borrower’s bank account. It constitutes an overdraft account, allowing the withdrawal of funds up to the approved limit.
Amount The loan amount is determined based on age, income, and credit record. Once borrowers meet the lender’s criteria, including factors such as age, income, and credit record, they are granted a line of credit, which determines their borrowing limit.
Interest Interest is charged on the entire loan amount. Interest is levied solely on the withdrawn amount within the approved credit limit.
Prepayment Full or partial pre-payments incur prepayment charges. Prepayments can be made with minimal or zero charges.
EMI structure Fixed EMIs, comprising both principal and interest, are payable. EMIs fluctuate based on loan terms, tenure, prepayment, and the amount withdrawn.

Particulars Personal Loan Flexi Loan
Type This loan is directly disbursed to the borrower’s bank account. It constitutes an overdraft account, allowing the withdrawal of funds up to the approved limit.
Amount The loan amount is determined based on age, income, and credit record. Once borrowers meet the lender’s criteria, including factors such as age, income, and credit record, they are granted a line of credit, which determines their borrowing limit.
Interest Interest is charged on the entire loan amount. Interest is levied solely on the withdrawn amount within the approved credit limit.
Prepayment Full or partial pre-payments incur prepayment charges. Prepayments can be made with minimal or zero charges.
EMI structure Fixed EMIs, comprising both principal and interest, are payable. EMIs fluctuate based on loan terms, tenure, prepayment, and the amount withdrawn.

Key Benefits of Personal Loan

No Collateral: Unlike secured loans like mortgages or car loans, personal loans don’t require putting up any assets as collateral. This makes them easier and faster to get, opening up borrowing options for many.

Credit Score: Paying back affordable personal loans on time improves credit scores. For those with no credit history, this makes personal loans a wise decision that will help them establish their trustworthiness.

Versatility: Personal loans are extremely flexible, unlike loans intended just for houses or cars, since borrowers may use them for a variety of purposes.

Hassle-free Documentation: The documentation process for quick personal loans is 100% online. Requirements include being an Indian citizen, age above 21 years and below 50-60 years, having a monthly source of income, and a minimum salary requirement of ₹10,000.

Quick Approval: Personal loans often come with fast approval processes. Unlike home loans that may take several weeks, approvals can be completed within 10 minutes, with funds transferred to the bank promptly.

Ready to borrow? Compare Flexi Loans and Personal Loans to find your best fit!

Apply Now!

Key Benefits of Flexi Loan

Speedy process: Flexi loans are swiftly approved with hassle-free documentation requirements. Application processes are streamlined, bypassing the long queues typically associated with traditional lending institutions.

Liquidity: Ready access to funds is available at all times with a flexi loan. Withdrawals can be made multiple times from the approved credit limit, ensuring liquidity as needed. Interest is charged only on the withdrawn amount, not the remaining balance, optimising cost-effectiveness.

Low EMIs: Flexible repayment options result in lower EMIs compared to fixed EMI plans. Pay EMI only on the amount withdrawn, reducing overall interest payments substantially.

Online Applications: The ease of online applications and quick disbursement procedures are features of Flexi loans. Through lender websites, borrowers may easily verify their eligibility, complete applications, and upload supporting documentation. Fast loan approval—typically granted in a few minutes—allows for quick access to finances.

Easy to Manage: Manage your hybrid Flexi personal loan account, which is similar to a savings account, with online fund withdrawals available anytime. Multiple prepayments can be made online, enhancing financial management convenience.

How is a Flexi Loan Better Than a Conventional Personal Loan?

Flexi loans offer several advantages over conventional personal loans:

  1. Flexible Repayment: With a Flexi loan, borrowers have the flexibility to withdraw funds as per their requirements and repay them at their convenience. You can make partial prepayments or repayments without any additional charges.

  2. Interest Savings: Since interest is calculated only on the outstanding balance of the loan, borrowers can save on interest costs with a Flexi loan. By making timely repayments or prepayments, they can reduce the overall interest burden and save money in the long run.

  3. Accessibility: Flexi loans provide borrowers with easy access to funds whenever needed. They can withdraw and repay funds multiple times within the approved credit limit without the need to reapply for a new loan. This quick access to funds makes Flexi loans an ideal choice for managing fluctuating expenses or unforeseen financial needs.

  4. Customized Withdrawals: Flexi loans allow borrowers to customize their withdrawals according to their needs. They can borrow only what is required at a given time, reducing unnecessary interest costs and optimizing their financial management.

  5. Fixed Borrowing Limit: In Flexi loans, borrowers are provided with a borrowing limit, ensuring that they only borrow what they need and have control over their loan amount, preventing overborrowing.

  6. Flexible Repayment Tenure: Unlike conventional personal loans with fixed repayment tenures, Flexi loans offer more flexibility in repayment. Borrowers can choose to pay interest-only EMIs, allowing them to reduce their monthly spending and allocate funds for other expenses.

Conclusion

Users can lower their EMI payments by paying interest-only EMIs and have the option to make a prepayment without paying extra in a hybrid flexi loan. Flexi loans may offer certain advantages, but they also involve higher risks, whereas a quick personal loan can be used for a variety of purposes. Any consumer must exercise diligence and research before choosing a loan with the most affordable interest rates and as per their requirements. You can now decide after reviewing the specifics of both personal and flexi loans.

Leave a Comment