A flexible loan is just like an ordinary loan accept it offers borrowers more control over how much you repay each month.
Just reading the word flexible conjures up images of simple, hassle free borrowing with the flexibility to pay it back quickly. So, let’s find out what it really means and what exactly is involved in taking out a flexible loan.
A flexible loan is a loan that allows you to increase or reduce the amount that you have borrowed. It also allows you to vary the repayments and alter your paying back schedule. In some cases, you are actually allowed to pay the loan back early without paying a penalty charge. Many people like the flexibility as it gives them some leeway to stay in control of their finances if something unexpected were to occur or if they found themselves being able to pay the loan back early.
This type of loan can be used for an array of different situations. Whether you are purchasing a new car, want to splash out on redecorating your house, or you find yourself with an unexpected financial expense. Flexible loans give you the flexibility (hence the name) to be in control of how much you pay back and for how long.
With this kind of loan, there are many pros due to its flexibility. The main one being that there is a wide range of borrowing options meaning you’re sure to find one to suit your needs. So, whether you’re looking to borrow small or large amounts over a long term or short term, there’s a flexible loan out there for you. In many cases, you could actually receive the money on the same day and many lenders offer ‘repayment holidays’ within their terms. This is an added extra flexibility to this type of loan. Furthermore, you can actually make additional payments at any time or pay your loan off early without incurring a charge.
With any loan, you always have to weigh up the risks. With the flexibility, naturally, there are a few of those pesky cons involved. The lend amount and rate available to you at the time of applying will be subject to your credit score, financial history and circumstances. So, this is something to look out for and keep on top of.
If you choose to borrow from a bank, usually you will have to be a customer for at least a month before applying for the loan. Always remember that, with any loan, it will most definitely come with late payment penalties. With a flexible loan, if you miss a payment that wasn’t granted (such as a repayment holiday) you will more than likely be charged a fee. Your loan will then be transferred over to a collections department. In the event that you continue to break your agreement, further charges will apply. So it’s always best to make sure you budget and have a structured plan to ensure you are able to fulfill all of your financial commitments.
Essentially, it comes down to the fact of you actually using the flexibility. Or you find yourself in a position to pay off the full amount of the loan early, it maybe worth it. If this doesn’t apply to you, then maybe it is best to just look out for the lowest rate you can find instead.
As long as your credit score is good and you are in a position to be able to make your repayments comfortably then you should have no problem being accepted. Just look out for conditions such as already being a customer before applying and such.
So, whether it is an unsecured personal loan you are looking for, the flexibility granted with a flexible loan can really help you out. As with everything in life, circumstances can change quickly, and this type of loan allows you to change with those circumstances.
If you are having financial difficulties or need to speak to someone regarding your financial situation before applying for a loan you can get free and confidential advice from The Money Advice Service, National Debtline or debt charity StepChange.
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Representative example: Borrow £1000 for 24 months at 24 equal instalments of £77.48. Total amount to repay £1,859.52. Interest £859.52. Annual interest rate 70% (fixed). APR rates range from 45.3% APR. to 1575% Max APR. Your APR rate will be based on your circumstances.
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