Upgrades are born out of necessities. To travel faster, bullock carts were upgraded to bikes and cars. To further speed up life, bike and car engines were upgraded. So, public demand rules the world of upgrade. One such demand in the financial world, specifically the loan sector, was that borrowers wanted to pay only the interest component in equated monthly instalments (EMIs). They wanted to pay the principal amount at the end of the tenor or even before it if they had money to spare.
Flexi Personal Loans Versus Conventional Personal Loans
Let’s look at two scenarios:
- Personal Loan
You have a medical emergency and need Rs.5 lakh urgently. You apply for a Personal Loan and get it in your account within 48 hours. The loan tenor is five years. But, after two years, you get a bonus in office. You repay a part of the loan and pay the part-prepayment charges (around 2%). A few months later, you need Rs.2 lakh to pay for your child’s education trip to NASA. You take a top-up loan. Your loan tenor ends, and you’ve repaid your loan.
- Flexi Personal Loan
You have a medical emergency and you need Rs.5 lakh urgently. But, this time, you already have an ongoing flexi account. The amount goes to your account via the national electronic funds transfer (NEFT) system, usually within four to five working hours. When you get the bonus after two years, you repay a part of the loan, for no prepayment charges. A few months later, you need Rs.2 lakh for your child’s educational trip to NASA. Don’t worry, you have the limit in your Flexi Loan. You can take it without having to go through the entire process. Your tenor ends, and you repay the principal amount.
Benefits of Flexi Term Loans
- You have the flexibility to prepay the loan using any extra money you have, whenever you have it. Since you pay the interest only on the amount you use, your interest amount goes down.
- Need the amount you have already repaid during the loan tenor? No problem! You can do it online, in a hassle-free manner and without any extra paperwork.
- Since you pay interest only on the amount you use on a daily basis, your monthly cash outflow could go down by almost 45%.
- The prepayment of the principal amount is free. Also, you need to pay no processing fee for the amount you use.
- There is no cap on the number of times you can withdraw money or deposit it during the loan tenor.
- The amount goes to your account quicker.
To sum up
A dropline facility could come in handy during emergencies. Also, why wait to repay the loan and pay extra charges and interest? You could take a flexi loan instead and reduce your monthly cash outflows. So, you no longer need to apply for separate loans to get married, refurbish your home, go on a luxurious vacation or start a business. Take when you want, give when you can!