Everyone takes a personal loan some time in their life. Cash crunches arise, projects become infeasible, or you might need to pay a family member’s medical bills. It happens to the best of us.
Luckily, many personal finance lenders in India offer loans at affordable personal loan interest rates. However, even with low rates, the EMI amount can total to a hefty amount. Besides, there are situations where you know that you want money, just not how much. For instance, funds for keeping your business afloat.
In such scenarios, a flexi loan for personal use might be the better alternative. Don’t know what they are? Keep reading.
What is a flexi personal loan?
In a flexi loan, the lender credits a predetermined loan amount into your bank account, from which you can borrow as much as you want, whenever you need it. The best part? You can choose to pay only the interest part of the EMI initially and the principal part after a certain period of the tenure is up.
This ensures that you don’t have to pay hefty EMIs, and you can borrow any amount depending on your financial state and requirements. As a result, the loan never feels like a burden. But more like a credit card, minus the high rates of interest.
Additional Read: Flexi Loan vs Personal Loan Know the Difference
Pay interest only on what you borrow
Another great benefit of a flexi loan is that you have to pay interest only on the borrowed component, and not the entire loan amount.
For instance, if you’ve taken a flexi loan of Rs. 5 Lakh on a 10% interest rate, of which you only need Rs. 1 lakh, the interest will only be charged on Rs. 1 lakh. This brings down your EMI significantly from what you would have to pay on the full amount, which again decreases the total loan cost.
Repay your loan faster
Personal finance lenders usually charge a prepayment penalty if you try to foreclose your loan. Depending on how long you’re into the tenure, this foreclosure charge may or may not eat into your monthly budget. Either way, you lose money all the same.
However, with a flexi loan, you can service the principal amount as and when you see fit. For instance, if you have surplus funds in a given month, you can use that to reduce your outstanding principal amount. This can help you reduce the loan tenure and the overall EMI burden.
Additional Read: Dos and don’ts for an instant personal loan in India
As you can see, Flexi loans are a great way to cover an ongoing financial requirement, such as home renovations, wedding expenses, or business requirements. Not only do you pay lower EMIs, but you also have the flexibility to pay interest only on the amount you borrow.
Like what you hear? Well, then opt for Tata Capital’s flexi loans today! Flexible tenures, attractive interest rates, easy personal loan eligibility, and excellent customer service – that’s why you get when you opt for our flexi loans!
Before applying, do use our personal loan EMI calculator to decide on a favourable tenure.