Financial flexibility is crucial in today's dynamic world. Whether it's an unforeseen emergency or a business expansion opportunity, having access to financing when you need it can make all the difference. Traditional loans typically have lengthy approval timelines and stringent repayment terms. This is where flexi loans can be a smart borrowing option for many Indians. Let us understand how.
What are Flexi Loans?
Flexi loans, also known as flexi personal loans or flexi finance cash loans, are a type of credit facility offered by financial institutions that gives you the flexibility to borrow as per your needs. Here are some key features of these loans:
- Borrowing: Borrow up to your approved loan limit as and when required, without multiple loan applications
- Repayment: Flexible repayment structure - you only need to pay interest on the loan amount utilised
- Tenure: Loan tenure up to 5 years (or higher) with option for foreclosure without hefty penalty charges
- Process: Completely online application and disbursal process for faster access
Benefits of Availing a Flexi Loan
Flexi financing offers several advantages that make it a preferred financing tool for many borrowers:
- Meet urgent cash needs: You can withdraw from your sanctioned flexi loan limit to meet any urgent cash requirements without going through lengthy loan procedures. This helps you handle emergencies smoothly.
- Better liquidity management: The flexible 'pay as you use' structure ensures you pay interest only on the amount you have withdrawn, not on the entire sanctioned amount. This helps optimise your liquidity better.
- Lower EMIs: Flexi loans come with the option of paying only interest instalments during the loan tenure and lower equated monthly instalments (EMIs) compared to other loan products. This offers convenience in repaying the loan.
- Foreclosure without hefty charges: You can prepay a flexi loan anytime without paying significant foreclosure or prepayment penalties. This allows faster reduction of the loan principal if funds permit.
- Quick access: The online application process followed by most lenders allows faster approval and disbursal. You can access funds in a few hours (for existing salaried customers).
Use Cases of Flexi Loans
From planning a dream vacation to consolidating existing debts, flexi loans offer financial assistance for various needs. Some common situations where these loans can improve your financial flexibility include:
- Planning for a wedding: Weddings can get very expensive. A flexi loan allows you to cover changing wedding plans or unplanned expenses smoothly.
- Overseas travel: You can withdraw from your sanctioned flexi loan limit to fund your international trips without impacting savings earmarked for other goals.
- Paying for higher education: The rising costs of quality education can be met partially or fully using flexi loans without being constrained by the immediate availability of funds.
- Medical treatment: Quality health care is expensive nowadays. Flexi loans enable you to manage hospitalisation or treatment costs efficiently at short notice.
- Debt consolidation: If you have multiple loans or credit card bills outstanding, you can consolidate everything under a flexi loan and benefit from better terms on interest costs and tenures.
- Renovating your home: Whether it is undertaking repairs or renovating your living space, a flexi loan allows you to complete your home improvement plans conveniently.
Assessing Your Flexi Loan Eligibility
Flexi loans allow loan limits generally up to ₹25-30 lakhs for salaried individuals. Your eligibility will depend on income, employment stability, credit score, existing debt obligations, etc. Many leading private sector banks and non-banking financial companies (NBFCs) now offer these loans.
While minimum salary requirements may vary across financial institutions, you need to have a good credit profile reflected through parameters like a high credit score, a low debt burden, and timely repayments on existing loans. Having an account with the lender may also help you get better eligibility.
Documentation needs are generally minimal, with just basic Know Your Customer (KYC) and income-related documents. Flexi business loans are also available for self-employed borrowers like doctors, CAs, etc. So based on your profile, check online with multiple lenders to understand the amount, tenure and flexi finance interest rate you can get approved for.
Summing Up
Flexi loans offer the twin benefit of financing access as per requirement and lighter repayments linked to actual usage. So, instead of taking a traditional personal loan, consider the flexi loan option for better financial flexibility.
Assess your needs prudently, check your eligibility across lenders and apply for a flexi loan that best suits your requirements. Use the funds judiciously for productive purposes only, and make sure to make timely repayments to ensure a healthy credit profile. Maintaining financial discipline, coupled with the flexibility that these loans offer, can empower you financially.
