Flexi Loan Vs. Personal Loan: Which Is Best for Short-Term Borrowing?

When it comes to short-term loans, AFI offers personal loan solutions to meet immediate financial needs. However, understanding the differences between each can help you make the right choice. In this article, we will delve into the key differences between flexi loans and instant personal loan, their respective benefits, and which one may be more suitable for your short-term borrowing needs.


What is a Flexi Loan?

A Flexi Loan is a type of loan facility that allows borrowers to withdraw funds as and when needed from a pre-approved loan limit. It functions similarly to a credit line, where you are approved for a certain amount but only pay interest on the amount you withdraw.


The features of Flexi Loans include:

1. Pre-approved loan limit:

The borrower has access up to a maximum limit as and when needed; however, interest is paid only on the amount withdrawn.


2. Flexible withdrawals:

You can withdraw funds several times, provided your loan limit does not exceed the amount of withdrawal.


3. Interest saving:

Unlike an orthodox loan, where interest is charged on the entire loan from date of disbursement, Flexi Loans charge interest only for an amount drawn upon.


4. Flexible payments:

With most lenders, you are free to make payments for any amount toward the principal at any time, and this reduces your burden of interest.


What is a Personal Loan?

A Personal Loan, on the other hand, is a fixed-sum loan that you receive as a lump sum. These loans come with fixed repayment schedules, typically monthly, and are repaid over a defined period (usually ranging from 12 months to 60 months).


Key features of personal loans include:

1. Fixed loan amount:

You receive the full loan amount upfront, repaying it over a defined tenure.


2. Fixed Interest Rate:

Most personal loans carry a fixed rate of interest. That means the amount you are charged as monthly pay remains the same during your loan tenure.


3. No collateral is needed:

Personal loans are generally not secured; hence no collateral is required to receive access to them.

 

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