What is Flexi Personal Loan – Its Benefits & How to Apply?
16 November 2022
A Flexi loan is a special type of personal loan with a pre-approved limit set by the lender from which you can withdraw money as and when you need it. The limit amount is set initially by the lender based on your credit profile. A Flexi personal loan helps meet an immediate need for money during an emergency.
This article discusses the features, benefits, interest rate, how to apply, documents required and the right time to opt for a Flexi loan. Read on!
What Are Flexi Loans?
A flexi loan is a type of personal loan with a pre-set credit limit. Depending on your credit profile, the lender will offer a pre-approved cash limit in the form of a credit line or overdraft facility. Flexi loan interest rate is charged only on the amount used by the borrower and not on the entire sanctioned amount.
You can repay the principal amount as and when you like. However, you need to clear the interest every month. You may also prepay the loan whenever you have surplus money in hand. Any salaried or self-employed individual can get a Flexi loan and use the amount to meet any financial needs.
The Flexi loan works in a manner similar to overdraft facilities. Once you apply for a Flexi personal loan, the lender pre-approves a loan amount based on your repayment capacity, income, credit score, etc. Money will be disbursed to your account without any added documentation or formalities.
After that, you can withdraw money within this credit limit for whatever reason and as many times as you want. Interest is charged on the amount that you spend. No interest is charged on the remaining loan amount. Whether you are self-employed or salaried, you can opt for a Flexi loan.
Features & Benefits of Flexible Personal Loans
Flexible loan or Flexi loan has several advantages over personal or any other type of loan which are discussed here:
1. Funds Available at All Times
Flexible loans will help you sail through any financial emergency requiring immediate cash outflow. Once the Flexi loan limit is approved, you can withdraw money anytime you want and in as many tranches as you wish.
2. Prepayment Option
In these loans, you have the freedom to prepay the amount you borrowed when you have additional money available. The standard repayment is also easy as you will borrow only that amount which you need and can quickly repay. You can use the Flexi loan calculator to compute the interest cost on your loan.
3. Moderate Interest Rate
Flexi loan interest rate is not on the higher side, and it also helps the borrower reduce interest payout. The interest rate is applicable only on the amount withdrawn and not the entire limit sanctioned by your lender.
4. Multiple Withdrawal Opportunity
It’s not like a usual loan wherein you are given the total loan amount in one go. In flexible loans, the borrower can make another withdrawal after he has borrowed the previous loan amount.
Documents Required to Apply for a Flexi Loan
If you are applying for a Flexi loan for the first time, you should be ready with the required documents. However, as it is an unsecured loan, very few documents are required.
You can check the official website of the lender or ask the representatives for a list of required documents. Here is what the lenders typically ask for:
Identity Proof: Aadhaar card, PAN card, passport, etc.
Income Proof: Payslips of the last 3 to 6 months will be required while availing Flexi loan for salaried employees.
Flexible personal loans are helpful during an emergency financial crisis. To be eligible, you must maintain a good credit score. Keep your documents handy to speed up the process. Make sure to check and compare the interest rates of various lenders. If you are looking for an instant loan in a hassle-free manner and with minimum documentation, just download the Navi App and apply now!
Q1. How is a Flexi loan different from a term loan?
Ans: One of the major differences between these types of loans is the interest rate. In the case of Flexi loan, interest is charged only on the amount utilised, whereas for a term loan, interest is calculated on the entire principal amount. Additionally, additional charges are applicable for part payment in case of term loans; however, there are no additional charges for part payment of Flexi loans.
Q2. Is there a difference between Flexi personal loan and personal line of credit?
Ans. There is no such difference between a Flexi personal loan and a personal line of credit. The name varies from provider to provider. In rare cases, a personal line of credit might have an interest free period.
Q3. What is part payment?
Ans: It is a type of loan repayment method in which you prepay a part of the loan amount as many times as you wish during the entire repayment tenure. Lenders usually do not charge additional charges on part payments for flexi loans.
Q4. Do all banks and NBFCs in India offer Flexi personal loans?
Ans: Not all banks and financial institutions offer Flexi loans. Financial institutions that do offer Flexi personal loans have varied sets of eligibility criteria, rates of interest and repayment rules.
Q5. What are hybrid Flexi personal loans?
Ans: It is a loan in which, initially, you only need to pay the interest for the utilised loan amount. During the subsequent tenure, you have to pay the interest and principal amount on the basis of money utilised. This reduces cash outflow for the first few years.
Before you go…
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Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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