Personal Loan

What is a Flexi Loan? All You Need to Know About Its Benefits and Features


A flex loan is a type of credit line facility or overdraft. It helps applicants borrow funds as and when required. However, they need to make sure the total amount they borrow does not exceed the specified credit limit.

The interest will be charged only on the total amount that is withdrawn by the borrower. The principal amount can be repaid at the convenience of the borrower. However, the interest amount will have to be cleared at regular intervals, depending on the terms and conditions of the lender.

Let us learn more about flexi personal loans in this article.

Features And Benefits Of Flexi Personal Loans

A flexi loan is perfect for those looking to apply for personal loans with relaxed repayment schedules.

Here are a few things you need to keep in mind about flexi personal loans:

  • Easy Access: Once a Flexi loan has been approved, you can withdraw any amount of money at any time. The condition, however, is that the total amount borrowed cannot exceed the credit limit approved by the lender. 
  • Flexible Repayment Schedule: Once you have taken out a Flexi loan, you can clear your outstanding payments at your convenience. Although you have to make your interest payments on time, there is no time limit on when to repay the principal. You can make payments whenever you have excess funds. 
  • Multiple Withdrawals: The best part of a flexi loan is that you can withdraw funds any number of times at your convenience, as long as they are within your approved credit limit. There is no limit on how many times you can withdraw funds, and there are no additional charges for multiple withdrawals. 
  • Low-Interest Component: As a borrower of flexi Loan, you can save on your interest amount. The interest here is calculated only on the total amount that is withdrawn by you, and not on the credit limit approved.For example, if you have a flexi loan of Rs. 10 lakhs but have withdrawn only Rs. 5 lakhs, you have to pay interest only on the Rs. 5 lakhs that you have withdrawn. As you keep clearing your dues, your interest amount keeps on reducing. 
  • No Need for Collateral: Since a flexi loan is essentially an overdraft facility, you don’t have to pledge any security or collateral for it. 

Eligibility for a Flexi Loan

Be it a salaried employee or a self-employed individual, anyone can apply for a Flexi loan. That said, different lenders follow different eligibility criteria while approving applications for Flexi personal loans.

The main factors considered while assessing eligibility for Flexi loans include your age, income, credit score, occupation or business continuity, and existing debts or financial obligations, if any. A credit score of 750 or above can offer you the chance of getting a lower interest rate for your loan.

Make sure you check your credit score before applying for any loan. If your credit score is low, here are a few steps to increase it:

  • Make sure you don’t delay your EMI payments. Set payment reminders if need be.
  • Restrict the usage of your credit card as far as possible
  • Choose a longer repayment tenure whenever you apply for a loan
  • Try not to take on too many loans at one time. Repay one before you apply for another.
  • Make sure there are no inaccuracies or errors in your CIBIL report
  • Choose different forms of credit and build a credit history. A healthy mix of secured and unsecured loans is recommended. Make sure you choose different tones and varied interest rates.

After following the above steps, it might take anywhere between six months and one year for your credit score to improve. Depending on the result, you can decide when to apply for a Flexi loan.

Documentation for Flexi Personal Loans

A few standard documents required to apply for Flexi personal loans include:

  • Your PAN Card, Aadhaar Card, Voter ID Card, Driving License, or Passport
  • Your Aadhar Card, Utility Bill (at least 3 months old), Property Purchase Agreement, Lease Agreement, Bank Account Statement, Driving License, and Passport serve as address proof.
  • Your salary slip (Form 16) or bank account statement serves as income proof if you are a salaried individual.

If you are a self-employed individual or professional, you may have to submit additional documents such as:

  • Your bank account statement, P&L statement, and balance sheet from previous years for income proof
  • Your Certificate of Practice, Partnership Deed, MOA and AOA, Shop Act License, GST Registration, and Filing Documents as Business Proof

Although these are the general requirements for flexi loans, your lender might ask for other documents based on your profile.

The Bottom Line

Flexi personal loans are best suited to meet any type of personal financial requirement. The interest rates are comparable or sometimes even lower than regular personal loans. You get to save more since you will be paying interest only on the amount that you have withdrawn.

The multiple withdrawals and the flexible repayment schedule make a Flexi loan worthwhile. Connect with a few lenders who offer Flexi Loans and compare their terms before finalising your decision. If you want to read more such blogs, visit the Piramal Finance website.