Flexi Personal Loan can be a solution in times of need. Here's why. During financial emergencies, having access to immediate funds is crucial. However, not everyone has cash readily available. To address this issue, banks offer Flexi Personal Loans, popularly known as Flexi Loans. Now, you may wonder what is a Flexi Loan. It’s a pre-approved cash limit, also known as an overdraft facility.
For example, Axis Bank offers 24x7 FlexiCredit to meet the specific needs of individual salary account holders.
What is a Flexi Loan?
A Flexi Loan is a type of Personal Loan that offers instant access to funds. Banks define a pre-approved credit limit for borrowers based on their income and creditworthiness. This loan functions similarly to an Overdraft facility provided by banks. Unlike fixed loans, where you get the entire amount upfront, you can withdraw only what you need, when you need it, up to your limit. This eliminates the need for multiple loan applications for smaller expenses.
How does Flexi Loan work?
The Flexi Loan operates like an Overdraft facility where the lender pre-approves a loan amount within a credit limit. Borrowers can withdraw funds from this credit limit as needed. You can withdraw any amount within your limit, as many times as needed, without additional applications. The interest is charged only on the amount withdrawn, not on the remaining loan amount. This allows borrowers to have greater control over their finances and pay interest only on the utilised sum. You can repay any amount of the principal at any time without penalty charges. This allows you to manage your finances and potentially save on interest.
Features & benefits of Flexible Personal Loans
Here are some key features of Flexible Personal Loans:
Funds available at all times
Flexi Loans provide the convenience of having funds readily available whenever required. Borrowers have the flexibility to withdraw funds as per their needs and emergencies. This ensures they can address any unforeseen expenses promptly without worrying about arranging immediate finance.
Prepayment option
One significant advantage of Flexi Loans is the option to make prepayments when borrowers have excess funds. By doing so, borrowers can reduce the burden of the principal loan amount and save on interest charges in the long run.
Interest rate
Interest rates on Flexi-Personal Loans depend on the amount and term period of the loan. Borrowers only pay interest on the amount utilized, not on the entire loan limit. This helps borrowers manage their repayments effectively while minimizing their overall interest expenses.
Multiple withdrawal opportunity
Flexi Loans offer borrowers the flexibility to withdraw funds multiple times within their approved credit limit. This enables them to address various financial requirements as they arise, providing a higher level of convenience and adaptability.
Documents required to apply for a Flexi Loan
One of the key advantages of Flexi Loans is that they require zero documentation as they are pre-approved credit facilities. This feature saves borrowers time and effort during the application process. However, borrowers need to meet certain eligibility criteria, which we will discuss in detail later.
Eligibility criteria to apply for a Flexi Loan
The eligibility criteria for Flexi Loans may vary from lender to lender. Generally, lenders consider factors such as income, employment type (salaried or self-employed), credit score, age, and repayment capability. Specific income and credit score requirements may differ between lenders. As a borrower, it is essential to check with your preferred lender regarding their eligibility criteria before applying for a Flexi Loan. To avail of a Flexi Personal Loan, you should have an account and a strong and relationship with the bank.
How to apply for a Flexi Loan?
Applying for Axis Bank 24x7 FlexiCredit is straightforward. Here's how you can apply:
1. Login with internet banking or mobile banking credentials to check your offer.
2. Enter OTP to confirm the 24x7 FlexiCredit overdraft facility.
3. Your overdraft facility is now ready to use.
Interest rates of Flexible Personal Loans
Interest rates on Flexi Personal Loans can vary based on the amount and tenure period. Borrowers only pay interest on the utilised amount, not on the entire loan limit or overdraft limit. To get the best deal, you should compare the interest rates of different banks. As the interest rate would change depending on loan amount and tenure, you should use the available online calculator to work out the details to make an informed decision.
Also Read: Making the most of your Personal Loan: 7 smart ways to use it
Wrapping up
With the right approach, a Personal Loan can be a powerful tool in achieving your financial objectives. Consider Axis Bank's 24x7 FlexiCredit, offering overdraft facilities of up to Rs 5 lakh, where interest is charged solely on the amount utilised and during its duration of use.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
