Financial management is a crucial aspect of everyone's lives, and managing it effectively requires knowledge of various financial products and services. Loans are one such product that helps individuals and businesses meet their financial goals by providing access to funds. However, traditional loan options come with rigid repayment terms and fixed interest rates that may not always be suitable for everyone. That's where flexi loan comes in.
Flexi loan has gained significant popularity among borrowers who prefer flexibility in their repayment terms and the ability to manage their finances more efficiently. But what exactly is flexi loan, and how does it work? This blog post will explore the flexi loan meaning and analyse its features and benefits. Keep reading to know more about flexi loan!
What is a Flexi-Personal Loan?
A flexi-personal loan provides borrowers with convenient access to funds. This type of loan comes with a pre-approved credit limit that can be utilised for any purpose at the borrower's discretion and convenience. A flexi hybrid loan is a type of loan that offers a revolving credit facility, allowing the borrower to withdraw from the approved amount as many times as required. At the same time, the borrower has the flexibility to pre-pay the loan at their convenience.
For instance, a borrower may withdraw Rs. 2 lakhs from the sanctioned loan amount in the first year, and another Rs. 2 lakhs after 6 months, making the total borrowed amount Rs. 4 lakhs. The borrower can then repay the entire amount before the end of the loan term as per their preference, be it at a gap of 6 months, 9 months or even 1 year.
To apply for these loans, the applicant should submit basic know-your-customer documents such as PAN card, address proof and income proof, and must also meet the lender's eligibility criteria.
Features of Flexi-Personal Loan
The following are some of the primary characteristics of a flexi hybrid loan:
Flexibility in Fund Withdrawal: A flexi loan offers easy access to funds, allowing borrowers to withdraw funds at any time within their approved credit limit, as per their needs.
Convenient Repayment Options: Borrowers with existing flexi loans have the flexibility to clear the outstanding principal amount at their convenience when they have excess funds.
Multiple Withdrawals Without Additional Charges: Flexi loan borrowers can make multiple fund withdrawals within their approved credit limit, without incurring any additional charges.
Lower Interest Charges: With a flexi-personal loan, borrowers have the opportunity to save on interest charges. The lender calculates interest only on the amount withdrawn by the borrower until its repayment.
No Collateral/Security Required: Availing of a flexi-personal loan or personal loan overdraft facility does not require any collateral or security. This makes it a suitable option for those who do not have any assets to pledge as collateral.
How Does a Flexi-Personal Loan Work?
A flexi hybrid Loan operates as an overdraft facility where lenders offer a pre-approved credit line to eligible customers. The pre-approved limit is determined based on factors such as the customer's credit score, repayment capacity, location, income, etc. The eligibility criteria for a flexi-personal loan may differ among lenders and depend on the credit profile of the applicant, but both salaried and self-employed individuals can apply for it.
The amount disbursed can be accessed instantly without any additional documentation or formalities, making it an ideal option for those in urgent need of funds. Interest is charged only on the amount utilised, and no interest is charged on the unused/balance amount. For instance, if a borrower has a pre-approved flexi loan limit of Rs. 5 lakhs but withdraws only Rs. 2 lakhs, they will be charged interest only on the withdrawn Rs. 2 lakhs. It is advisable to carefully read the loan agreement, terms and conditions before taking the loan to avoid any future disputes.
Conclusion
To sum it up, a flexi loan is a highly convenient and flexible financial product that allows borrowers to access funds within a pre-approved credit limit without any additional charges. The lower interest rates, easy repayment options and multiple withdrawals make flexi-personal loans a popular choice for people who require quick access to funds. Anyone, whether salaried or self-employed, can apply for a flexi-personal loan, as long as they meet the lender's eligibility criteria. A flexi hybrid loan, which combines the features of personal loan and overdraft facilities, is a popular option for borrowers.
Looking for a flexible and hassle-free loan option? Look no further than Tata Capital's personal loan overdraft. With a pre-approved credit limit of up to Rs. 35,00,000, one can withdraw funds as per their requirement and only pay interest on the amount used. In addition, enjoy multiple withdrawals and part-payment facilities at zero extra charges. Apply now and get the funds disbursed!
16 May 2023
4 mins read
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