Flexi Personal Loan

A Flexi Personal Loan is a personal loan where the maximum credit limit is set by the lender. A borrower can withdraw the loan either in full or in part within the loan tenure and repay at their convenience. Flexi loans can be thought of as a bag of funds. The bag has a maximum limit, but within those limits, a borrower can extract and refill as per their comfort.

Let us say a borrower borrows a flexi-term loan of 10 lakhs. And they encounter an urgent, unavoidable expense of 2 lakhs. A flexi loan would allow the borrower to withdraw these 2 lakhs from the total loan amount of 10 lakhs. The interest will be charged only on the withdrawn amount, which can be repaid at any point during the loan’s tenure. 

The term ‘flexi’ stands for flexible. These loans aim to offer the benefits of a personal loan to borrowers at much more flexible terms. Stay with us as we discuss the complete details, such as the Flexi loan interest rate, eligibility, documentation and much more.

Features and Benefits of Flexi Personal Loans

Some of the striking features of these loans are listed below:

• Immediate Assistance: These loans offer ready financial assistance for emergencies and unforeseen expenses. 
• Withdraw More Than Once: Flexi Loans allow borrowers to withdraw required amounts (within the sanction limit) multiple times, as and when needed. 
• Interest Only On the Used Amount: Interest is charged only on the used portion of the credit and not the entire limit. This results in greater interest savings and lower monthly EMIs.
• Flexible Repayments: The outstanding principal amount can be repaid as and when possible within the tenure. Borrowers can also juggle swiftly between interest-only EMIs and principal repayment. 
• Pre-payments: Flexi Loans can be prepaid at no additional charges. 

Interest Rate for Flexi Personal Loan

The flexi loan interest rate varies from bank to bank, and there is no standard rate of interest. The interest is charged monthly on the withdrawn amount until it is duly repaid. For instance, on a flexi loan of 10 lakhs, out of which, a borrower has withdrawn only 2 lakhs, the interest will be charged only on the withdrawn amount i.e 2 lakhs. 

Flexi Loans vs. Traditional Loans

Here is a quick comparison between flexi loans and traditional personal loans.

Basis	Flexi Loan	Traditional Personal Loan
Purpose	To take care of unforeseen financial requirements	To cater to a wide range of personal expenses
Loan Disbursement	A set limit of credit is disbursed  out of which borrowers can withdraw as per their need	The entire amount is disbursed at once
Loan Usage	Multiple withdrawals and multiple repayments are allowed	The loan amount can be withdrawn only once
Interest Charges	Interest charged only on the used portion	Interest charged on the entire loan amount
EMIs	Greater flexibility while repaying interest as well as principal component of the loan	Fixed EMI plans consisting of interest as well as principal component
Prepayment Charges	No charge applicable	Prepayments are subject to additional charges
Overall savings	Higher savings	Comparatively Lower savings

How Does the Flexi-Personal Loan Work?

Flexi personal loan’s interest treatment differentiates it from other loans. Firstly, the borrower is offered the flexibility to use only the necessary portion of the loan without worrying about the rest. Secondly, the interest is accrued only on this used amount while the rest of the loan goes interest-free. This, ultimately, results in better financial assistance and overall interest savings at the same time. 

Moreover, multiple withdrawals and simultaneous repayments characterise these loans and create a revolving line of credit. 

Eligibility Criteria  

Applicants satisfying the following criteria can easily apply for a flexible personal loan:

1. Eligible Applicants: Salaried/ Self-Employed
2. Age: 18-70 years*
3. Nationality: Indian
4. High Credit Scores
5. Other Criteria as specified by the lender

*Age Limit criterion differs for every lender

Documents Required for a Flexi Personal Loan

A borrower must keep the following documents handy while applying for a Flexi loan:

• KYC Documents: Identity Proof (Aadhar Card, Voter’s ID) and Address Proof (Utility Bills, Driver’s Licence)
• Income Proofs: Salary Slips/ IT Returns/ Balance Sheet and P&L Account/ Bank Statements etc.
• Employment Proof: Employee ID/ Proof of Business Registration/ Other Documents 

Apply For Flexi Loans With Urban Money

Urban Money’s expert team offers complete guidance to flexi loan borrowers. We match the financial standing of our customers with the best bank suitable for them to help secure the best deal.  Call us at 1800 208 3344 to get instant approvals.