What Makes Flexi Hybrid Loan A Better Option

For those looking to access funds quickly and easily, personal loans are among the best options that fit the bill. There are only a handful of loan eligibility requirements. A good credit score of 750 and above along with a good repayment history, a stable employment and a good debt-to-income ratio are all that are needed to get a personal loan approved from a bank or a non-banking finance company.

With the evolution of technology another loan variant available to borrowers needing quick funds is flexi hybrid loans.

What Is A Flexi Hybrid Loan?

It is a type of revolving credit wherein a borrower can withdraw from the approved amount as many times as required and, simultaneously, has the flexibility of pre-paying the loan as per convenience.

For example, a borrower in the first year withdraws Rs 1.5 lakh from the total sanctioned loan amount. Six months later the person withdraws an additional amount of Rs 1.5 lakh. So, the total loan amount borrowed from the bank stands at Rs 3 lakh. Now as per the person’s preference, be it at a gap of six months or nine months or even one year, the borrower can return the entire amount before the end of the loan term as and when possible.

The application procedure of these loans is quite similar to personal loans. The applicant needs to submit the basic know-your-customer documents, including PAN card as well as address and income proofs, and must also qualify the loan eligibility criteria set by the lender. After the bank receives the loan application, it thoroughly verifies the applicant’s profile. Once the loan application is sanctioned the approved amount is disbursed into the bank account of the borrower.

Features Of Flexi Hybrid Loan

Some of the important features of flexi hybrid loans are:

• Flexible Repayment Terms:

Both personal loans and hybrid loans have fixed repayment tenure. But unlike conventional personal loans, where the principal amount and the interest charged by the bank must be returned within a set repayment period through EMIs, in flexi hybrid loans the borrower benefits from flexible repayment terms. The borrower can choose to repay the borrowed sum as and when possible, as long as it is within the loan tenure.

• Interest:

Irrespective of whether the entire loan amount is used or not, the interest charged by the bank on personal loans is on the entire loan amount. But in flexi hybrid loans, the interest is charged only on the amount that has been used.

A flexi loan aids people in a number of ways. The following are the advantages of a flexi loan:

• Availability of fixed limit of funds to withdraw money
• Flexible loan repayment terms inclusive of prepayment facility
• Flexibility of withdrawing money as per the requirement
• Interest charged only on the withdrawn amount

Why Is Flexi Hybrid Loan A Better Option?

Most banks and financial institutions in India offer a wide range of loan solutions. Of these, personal loans are a popular choice. It offers many benefits, apart from having a simple and straightforward application and disbursal process.

Like flexi hybrid loans, personal loans help to cover a variety of financial goals like marriage, education, home renovation, business expenses, medical expenses, travel, etc. While both offer quick and easy funding, they differ in terms of nature, rate of interest, loan disbursal and the mode of repayment.

The personal loan rates are charged on an annual basis on the entire loan amount, whereas the interest rate on hybrid flexi loans is charged only on the used amount. So, the borrower does not end up spending extra paying interest on money that is not used. This helps to reduce the EMIs and free up money for other expenses.

However, hybrid loans have more strict eligibility criteria as compared to personal loans. It must be noted that this category of loans is usually available to salaried people with good credit scores.

Opting for loans is a big financial commitment. Hence, it is important to choose the right kind of loan having convenient repayment terms without compromising any other long-term commitments. If the need involves a large amount of money for a particular purpose, it is good to go for personal loans. But if the requirement is small and the need is spread over time with the possibility of some funds laying idle, it is good to choose flexi loans.

Conclusion

As the name suggests, flexi hybrid loans come with flexible terms. In flexi hybrid loans, the lender approves a loan limit. From this limit, the borrower can withdraw funds whenever required. There is also no restriction on the number of times the money can be withdrawn. In addition, the borrower has the flexibility to make partial pre-payments whenever possible as per convenience. However, it must be noted that all banks do not offer flexi loans.

IIFL Finance prioritises the need for funds of every borrower. Hence, it offers a variety of loans that have simple eligibility criteria and a straight-forward application process. No matter what type of loan you choose, with IIFL Finance you can enjoy a stress-free borrowing experience and even get a customized repayment schedule.