In today’s fast-paced world, where financial needs can arise unexpectedly, traditional personal loans may not always provide the flexibility and convenience that borrowers require. However, the emergence of flexi personal loans has revolutionised the lending industry by offering a convenient solution for the new age borrower. Read on to explore the structure and benefits of flexi personal loans, highlighting how they cater to the evolving needs of borrowers.
Flexi Personal Loan: What is it?
Before diving into the depths of the benefits of flexi personal loans, it is important to understand what they actually mean. Flexi personal loan, also known as a flexible personal loan, is a type of loan product offered by financial institutions such as banks or credit unions. It provides borrowers with greater flexibility in managing their loan repayment and accessing funds.
Here are some key features of a flexi personal loan:
- Revolving credit: Unlike traditional personal loans, which have a fixed loan amount, a flexi personal loan provides borrowers with a credit limit that they can draw from as needed. This means that you can borrow and repay multiple times within the credit limit without having to apply for a new loan each time.
- Withdrawals and repayments: With a flexi personal loan, you have the flexibility to withdraw funds from your approved credit limit whenever you require money. You can make multiple withdrawals or repayments within the specified limit and time frame. Interest is generally charged only on the amount utilised, rather than the entire credit limit.
- Repayment options: Flexi personal loans often offer flexible repayment options. You can choose to pay only the interest amount as monthly instalments and make principal repayments as and when you have surplus funds. This allows you to manage your cash flow more effectively.
- Interest charges: The interest on a flexi personal loan is typically charged on the utilised amount and for the duration it is borrowed. As the loan balance decreases with repayments, the interest charges decrease accordingly. This can potentially save you money compared to a traditional personal loan where interest is charged on the full loan amount from the beginning.
- Access to additional funds: Flexi personal loans provide a revolving credit facility. So, if you have repaid a portion of the loan, you can usually access those funds again without a new application. This can be useful if you have unexpected expenses or need temporary financial assistance.
It’s important to note that the specific terms and conditions of flexi personal loans may vary depending on the lender. It’s advisable to carefully review the loan agreement, including flexi loan interest rates, fees, repayment options, and any associated costs before deciding to take out a flexi personal loan.
Benefits of Flexi Personal Loans
Here are a few benefits of the flexi personal loans:
- Customisable Loan Amount:
Flexi personal loans allow borrowers to choose the loan amount based on their specific requirements. Unlike traditional loans with fixed amounts, flexi loans offer a wide range of options, empowering borrowers to select an amount that suits their needs. This flexibility ensures that borrowers do not borrow more than necessary, saving them from unnecessary interest payments.
- Borrowing and Repayment Freedom:
One of the key advantages of flexi personal loans is the freedom they offer in terms of borrowing and repayment. Borrowers have the flexibility to withdraw funds from their approved loan amount whenever needed, without the hassle of applying for a new loan each time. This feature is particularly beneficial for borrowers facing uncertain expenses or those who require funds in stages rather than all at once.
- Interest-only Payments:
Flexi personal loans also introduce the concept of interest-only payments, allowing borrowers to pay only the interest accrued on the utilised amount. This feature reduces the monthly financial burden and provides borrowers with greater control over their cash flow. By making interest-only payments, borrowers can manage their finances more efficiently and channel their resources towards other financial obligations. You can enjoy low interest personal loans if you opt for this option.
- Repayment Flexibility:
In addition to interest-only payments, flexi personal loans offer flexible repayment options. Borrowers can choose to repay the loan in full at the end of the loan tenure or make partial repayments whenever they have surplus funds. This feature allows borrowers to reduce their outstanding principal amount and lower their interest payments. Moreover, some lenders may even offer the option to convert the outstanding balance into a term loan with fixed monthly instalments, further enhancing the convenience for borrowers.
- No Prepayment Penalties:
Traditional loans often come with prepayment penalties, discouraging borrowers from paying off their loans early. However, flexi personal loans eliminate such penalties, enabling borrowers to repay their loans ahead of schedule without incurring any additional charges. This benefit encourages borrowers to become debt-free sooner, saving them substantial interest costs over the long term.
Flexi personal loans have emerged as a convenient solution for the new age borrower, catering to their evolving financial needs. With customisable loan amounts, borrowing freedom, interest-only payments, repayment flexibility, and no prepayment penalties, these loans provide borrowers with the flexibility and convenience required in today’s dynamic world. As the lending landscape continues to evolve, flexi personal loans are poised to become an increasingly popular choice for individuals seeking financial assistance.