Although both Flexi-personal loans and term loans can be used to fulfil your financial requirements, they are inherently different. The forms of finance are different from each other based on different parameters. Let us understand the difference between Flexi personal loans vs. Term loans:
A Flexi-personal loan is like an overdraft limit. It allows you to borrow funds up to a maximum pre-decided limit at a pre-decided rate of interest. Flexi-personal loans allow borrowers the freedom of availing funds whenever required. Term loans are a pre-decided amount at a fixed rate of interest that is required to be repaid as per the pre-decided repayment schedule.
A borrower who has been granted the limit can withdraw a part or the entire amount depending on their requirements. Interest will only be charged on the withdrawn amount. The maximum limit is determined based on the borrower’s eligibility and the lender’s policy.
Term loans attract a fixed rate of interest on the entire amount borrowed. Flexi-personal loans, on the other hand, attract interest only on the amount used and not on the entire amount that can be borrowed. For instance: if you are eligible for a loan of approximately 12 lakhs but end up withdrawing and using only 4 lakhs, you will be required to pay interest only on the borrowed amount.
The borrower is expected to repay the principal amount as well as the interest in the form of EMIs as per the repayment schedule. The same logic is also applied on a flexi-loan, except that the calculations will only be applied to the withdrawn amount. On the other hand, a personal loan which has been sanctioned will require you to pay EMIs on the entire amount, despite how much you have used.
Both types of loan offer a flexible repayment tenure and allows users to repay the loan whenever they have additional funds. The repayment schedule of the loan is pre-decided at the time of borrowing.
Thus, the following conditions make Flexi-personal loans the better choice:
The documents required to verify your eligibility for a personal loan include:
Our personal loan eligibility calculator can help in calculating the approximate amount you are eligible to borrow in a few simple steps.
The conditions to apply for a loan includes:
You can complete the loan application process in a few simple steps from the comfort of your home. All you need to do is visit our website and follow a few simple steps:
As per in the information provided in the online application, your eligibility will be determined. If yes, you will be given an instant in-principal approval. Our representative will get in touch to take your application further.
You could also apply for a loan through our mobile application (only if you are salaried) or walk into any of our physical branches (self employed and salaried) and get in touch with our staff who will guide you through the application process.
You can take our personal loan for a variety of reasons.
Here are some articles which could help you understand us and our products better. Do share your comments and let us know what you think!
Curious to know the maximum and minimum duration for personal loan? Read our blog to find out and get all the answers you want.
Are you applying for a personal loan as a co-signer or co-applicant? There are major differences between these two. Learn more!