Flexible loans are the type of loans designed to have flexibility, allowing borrowers to change the term of the loan to suit specific situations.
The loan is also designed with the specific restriction to protect the borrower from getting into more financial problem. In most cases, flexible loans are also quite similar to bank loans only it gives the borrower more leeway in using the funds.
Flexible loans are very much like the credit card or a type of an overdraft protection because of its mixture of several types of loans. One feature of flexible loans is it allows you to underpay or overpay your loan and no surcharge or penalty is charged to you.
Flexible loans can be designed or restricted in various ways.
Flexi loans can disburse a single payment but it also allows a borrower to get more money on the loan as long as a sizable amount of it has been paid. A loan lending company can also structure the financial aid to provide the borrower some kind of credit limit so he can just withdraw money from it little by little until the funds run out.
The best part of this type of loan is that even before the fund is exhausted, the borrower can re-apply to have the loan refreshed with additional cash.
One very useful function of flexible loans is when an individual is in a situation where he does not know the exact amount of money he would need for a specific expense. For instance, the cost of renovating a house is always never exact.
The expense for this kind of activity can either surpass the initial cost estimate or it can be lower. A flexible loan, in this case, can be very handy because the borrower can always overestimate the amount he needs in order to be secured that the money he has for the renovation will be enough to cover the expenses.
We are all aware that most lending companies including banks have limits when it comes to providing financial assistance. They usually have very strict and conservative repayment policies that you need to follow and many of them require some form of collateral from you for the loan.
Also, it is a way for them to be reassured that you won’t renege on your loan. Flexible loans are most of the time unsecured. If you have a good credit rating or score, chances are you will not have a problem applying for a flexible loan and at the same time be given a reasonable interest rate on your loan.