Flexi Loans vs Personal Loans: What should you choose?

Personal loans can help fund an urgent requirement, but so can Flexi loans. Read on to know more about the financial product

There are many ways to counter a challenging financial situation. You can use your savings, but that impacts your wealth and leaves you unprepared for potential problems in the future. Alternatively, many people redeem their investments to meet financial difficulties. Doing so, however, ensures you do not meet your investment goals.

A loan is better than both the alternatives, as it ensures your savings and investments are safe. You can pick from many types of loans, although you should choose a Flexi loan if you want control over your loan amount.

What is a Flexi loan?

A Flexi personal loan provides a pre-approved cash limit you can use whenever you need money. Most lenders charge moderate Flexi loans interest rates and offer flexible payback arrangements. The main advantage of taking out a Flexi personal loan is that banks only charge interest on the amount you use instead of the approved loan amount. It lowers the total interest you need to pay.

How is a Flexi loan better than a conventional personal loan?

Here are a few reasons why a Flexi loan could be a better option than conventional personal loans:

• In traditional online instant loans, the approved loan amount is disbursed in a single payment. There are no constraints on how much money you spend. Meanwhile, in a Flexi loan, you cannot exceed a borrowing limit. You can withdraw funds within this limit. It ensures that you are borrowing only the amount you need, giving you control over your loan.
• The tenure of a personal loan is fixed. You must pay the lender in EMIs within the duration. Interest is also fixed and applies to the entire loan amount, IDFC FIRST bank gives you access to personal loan EMI calculator so that you can calculate your monthly installments. In a Flexi loan, repayment is more flexible. You must only pay interest on the amount you have borrowed and not the sanctioned loan amount. You can also lower your interest by making part-prepayments when you have the funds. So, Flexi loans end up saving money as well.

• You can also pay interest-only EMIs with Flexi loans. With this tool, you can cut your monthly spending by up to 50% and free up funds for other expenses. It does not apply to an instant personal loan because the EMIs include both principal and interest payments. Flexi loans are, hence, incredibly flexible.

While an instant personal loan has its advantages, a Flexi personal loan is more user-friendly. Many lenders, including IDFC FIRST Bank, provide Flexi loans at affordable rates. You can save even more on interest with the right lender. IDFC FIRST Bank customises Flexi loans after factoring in your salary, credit score, and other details. The personal loan interest offered is especially low for customers with a good credit score and improving salaries.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.