Flexi Loans vs Term Loans: Here's What You Need to Know

When it comes to availing of online loans today, ease of access and quick disbursal time matters a lot. Emergencies can knock on your door at any time. There's no point availing of an online loan if you can't get the full amount you require. Similarly, if you have to wait a lot for your loan to get approved, you can lose precious time you don't have. Not meeting your financial needs on time can have serious consequences as well. 

Today, there are two popular types of online loans that can give you a much-needed cash infusion when you need it. They are term loans and Flexi personal loans. These loans can help you meet various financial goals you may have, including education expenses, planning a wedding, or home renovation. However, these two sources of funds do differ from each other in many ways. Here's all you need to know about these loans:

1.Nature

A term loan is usually a 'fixed' type of loan, in the sense that the loan amount is given out at once as a lump sum. The repayment tenure and interest rate are also fixed, and so is your repayment schedule. Depending upon your repayment capacity and the loan amount, you and your lender will develop a mutually agreed-upon repayment schedule. Flexi personal loans are, as the name suggests, flexible. These loans offer an approved loan limit (instead of a lump sum) from which you can borrow as needed. Apply for a Flexi loan online in case you're not sure about your cash requirement.

2.Interest Rate

Opting for a personal loan from a Flexi loan app will afford you more flexibility and help you save more on interest payments. This is because you only need to pay interest on the amount you borrow, not the total loan limit. As a result, your monthly EMIs come down, and you can pay off the loan much faster as well. A term loan is much more rigid in comparison. Interest will be charged on the entire loan amount, whether you use it or not. For example, let's say that a term loan of ₹6 Lakhs has been sanctioned to you. You will have to pay interest on the entire amount. However, if it's a Flexi personal loan and you only use ₹4 Lakhs of the total, you will be charged interest only on ₹4 Lakhs.

3.Usage

Small businesses generally use term loans to purchase equipment, real estate, and fulfil working capital needs. On the other hand, you can use a Flexi personal loan to take care of various financial needs. Whether you need money to finance a wedding or plan a vacation, Flexi personal loans can help you do all that and more. There's no restriction in terms of usage, and you can overcome any emergency without worrying.

4.Ease of Access

If quick and easy access to personal loans is what you require, look for the best Flexi loan in India. These loans usually come with less paperwork and faster approvals. Once your lender has approved your loan application has been approved, they typically credit the loan amount in your bank account within 24 hours or less. On the other hand, a term loan is relatively rigid, with a lengthy approval process and a lot of documentation.

In Conclusion

The above points explain the differences between a term loan and a Flexi personal loan. Make sure you apply for the correct type of loan based on your financial needs and select a proper lender who offers you affordable options.


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