Which is Better FlexiPay or Personal loan? How to Settle a Personal Loan

FlexiPay and personal loans are two popular financial options that can help you in times of financial need. Both of them have their advantages and disadvantages. But the important question is, Which is better? FlexiPay or Personal loan? In this article, we will compare both these options and help you choose the best one for your needs.

What is FlexiPay?

FlexiPay is a type of loan offered by various banks and financial institutions in India. It is a hybrid loan that combines the features of both a personal loan and a credit card. The main advantage of FlexiPay over a personal loan is that it allows you to borrow money when you need it and repay it in flexible instalments.

With FlexiPay, you are given a pre-approved credit limit based on your income and credit score. You can borrow money from this credit limit whenever you need it. The interest rate is charged only on the amount borrowed and not on the entire credit limit.

For example, if you are given a credit limit of 1 lakh rupees and you borrow 50,000 rupees, you will only pay interest on 50,000 rupees and not on the entire 1 lakh rupees. This can save you a lot of money in interest charges.

The repayment of FlexiPay is also flexible. You can choose to pay back the borrowed amount in EMIs or a lump sum amount. You can also choose to make partial repayments as and when you have extra cash.

What is a Personal Loan?

A personal loan is a type of unsecured loan where you borrow money from a bank or financial institution without providing any collateral. The main advantage of a personal loan is that you can use the funds for any purpose, be it a medical emergency, education, or buying a new car.

The loan amount is usually based on your income, credit score, and repayment history. The interest rate on personal loans is higher than secured loans like home loans and car loans as there is no collateral involved.

Repaying a personal loan is done through fixed EMIs over a predetermined period, usually ranging from 1 to 5 years. Some lenders may also allow you to prepay your loan amount without any penalty charges.

Which is Better? FlexiPay or Personal Loan?

The choice between FlexiPay and personal loan depends on your needs and financial situation.

FlexiPay is an attractive option if you require funds for a short period. The flexible repayment options and the fact that you only pay interest on the amount borrowed can make it a more cost-effective option. Moreover, the pre-approved credit limit can give you peace of mind as you have access to funds when you need them.

On the other hand, a personal loan is better suited for a larger and long-term financial need. The higher loan amount and longer repayment tenure can help you spread your expenses over a more extended period. Moreover, you can get a more competitive interest rate if you have a good credit score and repayment history. You should also consider taking a personal loan if you do not want to be restricted by a pre-approved credit limit.

How to Settle a Personal Loan?

If you have taken a personal loan and are unable to repay it, you may explore options to settle it through a loan settlement. Here are some steps to settle your personal loan:

Step 1: Assess your financial situation

Before approaching your lender for a settlement, you should assess your financial situation. This will help you understand how much you can afford to pay and negotiate a settlement amount with your lender.

Step 2: Negotiate with your lender

Once you have assessed your financial situation, you can approach your lender and negotiate a settlement amount. You can offer to pay a lump sum amount or a reduced amount over a longer period.

Step 3: Get a settlement agreement in writing

If your lender agrees to settle your loan, make sure to get a settlement agreement in writing. This agreement should detail the settlement amount, the payment schedule, and any other terms and conditions.

Step 4: Pay the settlement amount

Once you have agreed to the settlement terms, make sure to pay the settlement amount as per the agreement. Once the payment is made, make sure to get a receipt or acknowledgement from your lender.

In conclusion, both FlexiPay and personal loan have their advantages and disadvantages. The choice between the two depends on your financial situation and needs. If you need funds for a short period, FlexiPay can be a more cost-effective option. However, if you need a larger loan amount for a longer period, a personal loan may be a better choice. Whatever option you choose, make sure to assess your financial situation and repayment capacity before taking the loan.