Flexible loans are a form of personal loan. These loans are commonly known as Flexi-loans. A Flexible loan has a pre-approved limit and the borrower can withdraw any amount, up to but not exceeding, that limit. They can withdraw it whenever they want at the time of financial needs.

For example, if you have a flexible loan that is pre-approved at Rs. 1,00,000 then you can withdraw it at multiple instances at variable amounts such as 25000, 30000, 40000. Remember, the total amount that you withdraw should be within the credit limit. Therefore,

25000 + 30000 + 40000 = 95000, which means you only have Rs. 5000 left to withdraw.

How to apply for flexible loans?

You can apply for a flexible loan online or offline as per your convenience. Much like other personal loans, a Flexible loan also requires minimum documentation. You will need to provide proof of identity, address, income, and age for verification.

In order to apply for the flexible loan online, you must visit the lender’s website and fill the application form. You will have to upload the relevant documents for authentication and loan approval. Once your flexible loan has been sanctioned, the credit amount will be added to your loan account. You can withdraw your desired sum from the total credit amount as and when you need it.

To apply offline for a flexible loan, you must visit the bank or NBFC. You will need to fill out an application form and submit photocopies of your relevant documents. Once your flexible loan is approved, the amount will be credited to your account for withdrawal.

Since most banks and NBFCs offer flexible loans to account holders, the application and approval process may be simplified.

Top Benefits of availing a Flexible loan:

Flexible loans are favourable to the borrower. They are incredibly easy to acquire and repay. They offer more benefits as well which make them very desirable financial instruments. Some benefits of Flexible loans are:

1. Flexible terms of borrowing

Flexible loans come with a pre-approved limit. Therefore, the borrower can withdraw any amount, as many times as they need, for any purpose within the limit.

2. Multiple withdrawal options

A flexible loan can be withdrawn at multiple intervals as long as you do not exceed the credit limit. That means you can withdraw any sum of money at any time with ease. Even if you have repaid the previous amount you borrowed, you can withdraw more money from the credit, without exceeding it. This helps avoid applying for additional loans with over-hauled procedures.

For instance, let us assume you have a loan credit of Rs. 1,00,000 and you withdrew Rs. 10,000 for a medical emergency. It is a small amount so you can probably re-pay it within a month. In case you need to borrow more funds during the next month, you still have Rs. 90,000 in your Flexible loan credit account. You can withdraw as many times as you want till you reach your Rs. 1,00,000 credit limit.

3. Flexible terms of repayment

The terms of a Flexible loan are in favour of the borrower. The interest on the loan is only applicable to the aggregate amount you actually withdraw, not the total flexible loan credit amount. That means if you withdraw Rs. 10,000 from your credit limit of Rs. 1,00,000 then you only have to pay interest for Rs. 10,000.

Flexible loans also allow the borrower to adjust payments. If you are short on funds and cannot pay the EMI, the instalment can be skipped with a formal notice to the financial institution. This addendum will have to be discussed during the commissioning of the Flexible loan agreement.

You can also repay the entire remaining instalments in bulk and settle the loan to avoid future interests.

4. Low rates of interest

Since a flexible loan only charges interests on the actual amount borrowed, the EMIs are considerably lower. You only have to pay interest on the amount you withdrew, not the interest endorsed by your lender. Therefore, if you borrow less, then you pay very low EMIs for your Flexible loan.

5. Minimum documentation required

Since Flexible loans are pre-sanctioned, they require very few documents for approval and disbursement. You need to provide the following documents which are easily available:

1. Identity proof
2. Proof of Income
3. Proof of Age
4. Address proof

6. No foreclosure charges

If you have the means to foreclose your loan, then you can do so with no additional charges. That means, if you can repay and settle the loan before the defined time period, you can do so with ease. A flexible loan does not charge any surplus for fore-closures. There will be no additional interests or financial consequences.

Flexible loans offer exclusive features that are otherwise unavailable in other loans. It is a useful financial tool that is completely favourable to the borrower. You can avail of a flexible loan and reap its multitude of benefits without having to go through the hassle of long loan applications.