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What is Flexi Personal Loan? & How it Works?

3 Mins 17 Feb 2022 0 COMMENT


Having convenient access to funds as and when you need it can be a tremendous boon when trying to seek funding. Although belonging to the category of a personal loan, a flexible personal loan is a different variant in some aspects. Let's find out how it differs and what exactly does a flexi personal loan entail.

What is a flexi personal loan?

As a particular type of personal loan, a flexible personal loan provides you with a pre-approved credit limit from a lending institution that you can withdraw whenever you need the money.

You can use the money to consolidate your debts or pay for significant expenses, use it to fund a long holiday or buy an expensive gadget.

With a fixed interest rate and monthly payments for the loan tenure, securing a flexi personal loan can be helpful to meet immediate demand for money during emergencies. However, the pre-approved credit limit amount will be set by the lender based on your credit profile.

Additional Read: Are there tax benefits on personal loans? Find out here

Features of a flexi personal loan 

Some of its many features include:

  • It is similar to an overdraft facility offered by banks. That means, as a borrower, you can withdraw from the credit limit on your flexi personal loan approved by the lender.
  • Based on your convenience, you can make a prepayment on the loan.
  • The interest rate on a flexi personal loan will depend on the loan amount you use and its tenure.
  • While you have the flexibility of repaying the outstanding loan amount, you would need to pay the interest each month.

How it works

Similar to an overdraft facility, you receive a pre-approved loan amount from the lender, and you can withdraw from the pool of funds within the set limit.

You can opt to use the loan for any purpose, and depending on the amount you use, you will be charged interest. However, the remaining loan amount that you do not use will not accrue any interest. That means you only get to pay for the amount you withdraw and not the entire credit limit sanctioned.

Interest charged only on the withdrawn amount is a vital benefit, especially when funding a vacation or home renovation that usually have additional expenses you may not have accounted for.

Additional Read: The Ten Commandments Of Effective Money Management In Your 20s

Benefits of a flexi personal loan

Compared to any other type of unsecured loan, a flexi personal loan offers several advantages. These include: 

·  Availability of funds at all times.

Based on the credit limit set by your lender, you can withdraw money in as many tranches as you wish and at any time from the pool of funds. A flexible loan is helpful in sailing through financial emergencies that may require you to get access to instant cash outflow.

·  Option to prepay.

With a flexible personal loan, you have the chance of making the payments on the amount you have borrowed whenever you have additional funds available to repay. Since you will only borrow the amount you need, you can quickly repay whenever you can.

·  Affordable interest rates.

Since the interest rate is applied only on the withdrawn amount and not on the entire credit limit set by your lender, the loan interest rate is moderate and can help you reduce your overall interest pay-out.

·  Multiple opportunities to withdraw.

Unlike a usual personal loan where you are provided with the total loan amount in one go, a flexi personal loan allows you to withdraw as many times as you desire from the set limit depending upon your need.

Additional Read: Ways to meet your financial goals


As an alternative solution to a personal loan that gives you the benefit of low-interest rates, a flexi personal loan gives you a wide range of benefits that personal loans do not provide. However, to get a high pre-approved credit limit, you will need to ensure that your credit history and score are outstanding. Choose the right lender to seek a flexi personal loan and benefit from borrowing funds on a pre-approved loan limit depending on your credit score.


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