When applying for a loan you need to make sure you get the right loan for you. You need to make sure that the loan you avail fulfils all your financial requirements with ease. There are a lot of loan providers available in the financial market that will offer you both Personal Loan and Hybrid Flexi loans. While both the options will help you get the necessary financing there are a few factors that set them apart. Personal loans and Flexi loans can cover a variety of financial goals like marriage, education, home renovation, vacation, business expenses, etc. However, the difference is quite visible in terms of their nature, rate of interest, loan disbursal and the mode of repayment.
- Nature Of The Loan
A regular personal loan is generally extended by a lender for a particular period of time with an agreed-upon repayment schedule that is subjected to a fixed rate of interest. The loan sanction is the funding that you’re approved for and is available for use as a lump sum upon disbursal. There are no spending restrictions on personal loan whatsoever.
With a Hybrid Flexi Loan, you are approved for a loan limit. From this limit, you can withdraw funds whenever you require and as many times as needed. Here, you can also repay the loan when you have extra cash and make the payment as per your convenience.
- Application Procedure
Whether you apply for a Personal Loan or a Flexi Hybrid Personal Loan the process is quite similar. The application procedure is carried out online and the process is quick and hassle-free. You need to make sure you fulfil the loan eligibility criteria set by the lender, submit the basic required documents for a smooth loan process and instant approval. Once your loan application is verified and approved the amount will get disbursed to your bank account.
- Rate of Interest
A term loan is mostly subjected to a fixed rate of interest that is being charged on the entire loan amount, whether the amount is used or not. However, unlike a rigid term loan that offers little room on the interest front, a Flexi Loan only requires you to pay interest on the amount that has been used. With a Flexi personal loan, you get incredible flexibility and affordability as you don’t spend excess amounts paying interest rates on the money that has not been used. This brings down your EMIs and helps you manage your finances with ease.
- Loan Tenure And Repayment
For a regular personal loan, the tenor is a set repayment period during which you must repay your dues in EMIs. Many banks and NBFCs offer flexible tenure on loans, the entire loan amount and interest gets divided across the entire tenor and the same amount in EMIs. Besides, the rate of interest is charged on the entire loan amount.
Flexi Loans are quite similar to the term loan with the provision to repay the principal amount at the end of the loan tenor. This means that you have more time to plan your loan repayment and make necessary provisions regarding your finances. On a monthly basis, your Equated monthly instalments (EMIs) will comprise only the interest component. This way you can pay up to 45%* lesser EMI, making the repayment process much easier.
- Loan Disbursal
In the case of a regular term loan, the loan amount disbursal process is quite straightforward. Once you’ve completed the application process and are approved for a sanction, the lender then authorises disbursal to your registered bank account. However, with the Hybrid Flexi Loan, only the amount you wish to utilize gets disbursed into your bank account. This gives you complete access to your loan and the loan amount you’re liable to pay.
Term loans usually have a rigorous approval process that requires a great deal of verification and documentation. So, availing the loan is a bit time consuming as compared to Flexi loans. On the other hand, a Hybrid Flexi Loan can get you instant approval on loan with money credited to your bank account in 24 hours. You can apply for a loan online in a couple of minutes by simply sending your online application form for approval.
While both Personal Loan and Hybrid Flexi Loan offer you funding easily and quickly. You can opt for the loan based on your needs, financial capabilities and other such factors and go for the one that works best for you. With a better understanding of these personal loan variants, you can make an informed decision that helps you manage your finances better.