Personal loans are a great way to fund any of your expenses, be it a wedding, medical emergency, or vacation. They give you the complete freedom to decide how to spend the money you borrow. Several NBFCs and banks offer personal loans at an extremely attractive interest rate and with very few details required. If you have a steady income and a good credit score, a personal loan can be an easy source of funds for you.
However, if you opt not to spend the complete amount borrowed, you will still have to pay EMIs for the total sum. Hybrid Flexi loans were introduced to address this very issue, offering an alternative that includes flexible repayment and borrowing options.
Hybrid Flexi or Personal Loan: What’s The Better Choice?
Both personal and flexible loans can cover a range of financial requirements, but a few crucial factors differentiate the two from each other. Once you examine your needs, financial capabilities, and other factors, you may realize that one is far more beneficial to you than the other.
Get a thorough understanding of the difference between hybrid Flexi loans and personal loans right here:
Type Of Loan
When it comes to a personal loan, banks or NBFCs will give you a rigid repayment schedule and a fixed interest rate. With hybrid Flexi loans, the one fixed aspect will be the cash limit dictated by the lender. This predetermined cash limit will be accessible to you, and you can withdraw money whenever you want by informing the bank or NBFC. The amount you pay back for a flexible loan can be calculated using a Flexi loan EMI calculator.
Freedom Of Repayment
Personal loans give you the advantage of knowing exactly how much you have to repay and the period you will be paying EMIs for. However, in this case, you will be charged an EMI for the total amount borrowed, even if you choose not to use it all. Furthermore, you may be charged a penalty if you decide to repay a significant sum at one point because you have the funds. Lenders levy this penalty as they miss out on the interest they would have earned from the borrowed amount.
Repayment is far more flexible for Flexi hybrid personal loans. You only pay interest on the borrowed amount, not the total cash limit. The more significant advantage is that you can make pre-payments when you have the funds, reducing the amount due. If you are confident that you will eventually get a cash injection that will make it easier to repay the amount borrowed, a Flexi hybrid loan lets you do that without having to pay a penalty for the same.
Interest Rates Charged
Personal loans involve a specific interest rate, which will not change over the tenure of your loan. With hybrid Flexi loans, you will only pay interest on the amount borrowed. This saves you money that would otherwise be drained as interest on unused funds.
However, if it is certain that you will require the entire amount borrowed, a personal loan might end up giving you a better interest rate than a Flexi loan.
When deciding what type of loan you require, think of your needs. If there are periodic payments involved, such as monthly medical fees, the Flexi hybrid loan might be the better option for you. By borrowing only the amount you require, you ensure you do not spend the money borrowed on unrelated expenses.
Certain hybrid Flexi loans give you the freedom to pay interest-only EMIs. These offer an invaluable advantage and can decrease the total due by nearly 50%. As a feature, interest-only EMIs can be useful during periods when you require your funds for other purposes. This facility is usually not available for regular personal loans, where you are charged a fixed amount that includes principal and interest payments.
Finding The Right Fit For You Hybrid Flexi loans and personal loans are both excellent sources of immediate funding. When choosing between the two, keep in mind your objective, the interest rate, and other factors. Now that you know the differences between the two loans, you can make an informed choice. And Ruloans is here to help you take the next step.