Partner With Us NRI

Open Free Demat Account Online with ICICIDIRECT

What is Flexi Personal Loan? & How it Works?


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Interest charged only on the withdrawn amount is a vital benefit, especially when funding a vacation or home renovation that usually have additional expenses you may not have accounted for.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


ICICI Securities Ltd.( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No : 022 - 2288 2460, 022 - 2288 2470.  Please note, loans related services are not Exchange traded products and I-Sec is acting as a distributor to solicit these products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest.  I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing.

Most Popular

  • 13 May 2022
  • ICICI Securities

The Five-Point Financial Planning Checklist For Your Family

Whether you just got married or planning to have a baby or have dependents, you should have financial plans for every stage in your life to ensure a secured future for your family members. Here are five things you can do financially for your family.   

  • 12 May 2022
  • ICICI Securities

What is a Zero Coupon Bond?

You get fixed returns in the form of interest until maturity when you invest in a bond. Zero-coupon bonds work a little differently. In this article, find out what zero-coupon bonds are, their advantages and whether you should invest in them. 

  • 12 May 2022
  • ICICI Securities

What are Cross Currency Pairs?

The forex market is the largest financial market globally. Currency trading is a lucrative and booming business. While most currencies trading happens in relation to the US Dollar, some don’t. That forms the basis of cross currency pairs. Here’s what you need to know about it. 

  • 12 May 2022
  • ICICI Securities

Investing principles from Benjamin Graham: The Father of Value Investing

Benjamin Graham was a British born economist, professor, and investor who taught at Columbia University. He was also a mentor to some of the most famous investors of the 20th century, including Irving Khan, John Templeton, & Warren Buffett. Buffett called him "the second most influential figure in his life, only after my father". 

  • 12 May 2022
  • ICICI Securities

How to Invest in Nifty 50?

The Nifty 50 is the benchmark index of the National Stock Exchange. It represents the 50 largest companies listed in India. Investing in the Nifty 50 can be a good idea for those looking to make index-linked returns. Here’s how you can invest in the index. 

  • 12 May 2022
  • ICICI Securities

Investment philosophy of Cathie Wood: The most powerful woman on Wall Street

Catherine Duddy Wood, also called Cathie Wood, is an investor who primarily invests in disruptive technologies and is the founder, chief executive officer, and chief investment officer of ARK Investment Management, LLC, an investment management firm mostly active in the United States.

  • 11 May 2022
  • ICICI Securities

How to Use Technology to Improve Your Finances

Technology has made life simpler for everyone. In the realm of personal finance, technology has streamlined many processes—from budgeting to automating your payments. On National Technology Day, let’s look at how technology has transformed our finances. 

  • 11 May 2022
  • ICICI Securities

How to Invest in your Every Goal with Mutual Funds?

Each of us is unique. We have different needs and goals in life. Some of us can ride along swinging markets, while some may need a relatively conservative investment tool. 

  • 11 May 2022
  • ICICI Securities

Four Reasons Why Entrepreneurs should Invest in Equity Mutual Funds

Equity mutual funds provide growth opportunities not just for individual investors but also for entrepreneurs and corporates. They make excellent investments for anyone looking for wealth creation. This article will give you four reasons why businesspeople should consider investing in equity mutual funds.