What is a Flexi Loan?

  • Updated on: 6 Mar 2024
  • Published on: 4 May 2023
What is a Flexi Loan?

A flexi loan is a type of credit that gives you access to finances when needed and the flexibility to repay when you can. Instead of getting a lump sum amount all at once, you get a sanctioned credit limit from which you can withdraw funds as and when required.

Overall, this type of credit can give you:

  • More control over borrowing
  • Help you save on interest since you only pay interest on what you use

Now that you know the meaning of a flexi loan, make sure that you read the terms and conditions carefully. Read on to learn more about this form of credit.

Top 7 Characteristics of a Flexi Loan

Here are some features of a flexi personal loan:

  • Pre-Approved Credit Limit: You get an approved credit limit and you can withdraw funds that you require
  • Flexible Repayment Facility: Repay the loan in part or total, as per your convenience, within the loan tenure.
  • Competitive Flexi Loan Interest Rate: The interest rate on this loan depends on your lender and your creditworthiness. 
  • Affordable Credit Option: You have to pay the interest charges only on the amount you have withdrawn and not on the entire sanctioned limit
  • No Prepayment Charges: You can make prepayments without incurring any charges, thus allowing you to save on interest dues
  • Multiple Withdrawals: You can make multiple withdrawals within the credit limit without having to apply for a new loan each time
  • Online Access: Not only can you withdraw money online, but you can also monitor your loan balance using your lender’s website or app

Benefits of Choosing a Flexi Personal Loan

  • This type of online personal loan allows you to pay interest only on the amount of money that you actually withdraw and for the time you use it. 
  • This helps you borrow cost-effectively.
  • A credit facility like this is a great option if you have recurring expenses such as tuition fees, utility bills, EMI payments, etc.
  • So, you can borrow only what you need and save on interest payments on the whole loan amount.
  • Furthermore, if you need varying amounts of finance at different times, such as for a home renovation, this personal loan is ideal.

Features & Advantages of Flexible Personal Loans

Here’s a quick rundown of pros and other essential attributes of this facility:

  • Better flexibility in terms of withdrawing funds
  • Reduced borrowing costs since interest is charged only on the amount utilised
  • No need to pledge valuable assets as collateral 
  • Quick approval and no lengthy paperwork
  • Easy-to-meet eligibility criteria
  • Repay the outstanding loan amount whenever possible

Also Read: What Is An Installment Loan?

How Does a Flexi Loan Work

  • A flexi personal loan works in a similar way as that of an overdraft facility. 
  • You need to apply for the loan with a financial institution or a bank. 
  • The lender decides on a pre-approved sum that you can borrow based on various factors like:
  1. Income and employment
  2. Repayment capacity
  3. Credit report and score
  4. Credit utilization ratio
  5. Age and residence
  • You will receive the funds in your bank account and you can use the pre-approved credit limit for various needs. 
  • Note that the interest is incurred only on the amount you spend, not the total pre-approved credit limit.

How to Apply for a Flexi Loan

Here’s the process that you need to follow:

  • Step 1: Choose a lender by comparing the interest rates, fees and terms.
  • Step 2: Check if you meet the lender’s eligibility criteria, such as age, credit score and income.
  • Step 3: Fill out your loan application by providing necessary details like your name, address, employment and income. 
  • Step 4: Submit the application along with the required documents and await approval.
  • Alternatively, you can also walk into any branch of a bank or NBFC that you are planning on taking a loan from. 
  • The representatives can help you complete this process offline.

This loan can be a convenient and flexible way of funding your needs. However, if you need instant cash, you can get an Instant Cash Loan under 10 minutes from Fibe. With affordable interest rates and flexible tenure options, you can get ample funding of up to ₹5 lakhs to meet your needs. Simply download the Fibe Personal Loan App on your smartphone to apply.

FAQs on Flexi Personal Loan

What is the difference between a flexi loan and a personal loan?

Here’s how these loans differ:

  • With a personal loan, you receive a lump sum loan amount that you repay in fixed monthly instalments over a set loan term. 
  • On the other hand, flexi financing gives you a pre-approved credit limit that you can withdraw from as needed and repay when you can.

What is the benefit of a flexi personal loan?

  • You get a pre-approved credit limit
  • You only pay interest on the funds that you actually use
  • You enjoy competitive interest rates
  • You can get quick approval
  • You don’t need to pay any prepayment charges
  • You can make multiple withdrawals as and when required from the sanctioned limit 

Does this type of loan affect credit scores?

Yes, it can affect in the following ways:

  • If you make timely payments, your credit score can increase. 
  • On the other hand, if you miss payments or default on the loan, it can negatively affect your credit score.

How do I repay this loan?

You can repay this loan by:

  • Making timely interest payments every month
  • Paying off the loan amount by the due date

How is a flexi loan different from a term loan?

Here are some essential pointers to note:

ParameterFlexi LoanTerm Loan
Loan AmountThe lender provides a pre-approved credit limitThe lender disburses the entire approved amount to your bank account
InterestThe interest is applicable only on the amount you utilise, not on the whole credit limitThe interest is applicable on the total loan amount
PrepaymentYou can prepay the loan without any additional chargesYou need to pay prepayment charges for partial or full prepayment, depending on the lender
EMIThe EMI amount depends on the amount that you useYou need to pay a fixed EMI that is pre-decided based on applicable loan terms

How much amount can I get as a flexi loan?

The lender approves the limit based on:

  • Your age and residence
  • Your income and employment
  • Your credit report and score
  • Your repayment capacity
  • Your credit utilization ratio

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