Hybrid Flexi Loan vs Personal Loan: Which one is Better?

Overview

Availing of a loan proves to be beneficial in several ways, especially for individuals with a steady income and a good credit score. However, when planning to borrow a loan, one must choose wisely to ensure that it meets all their desired financial requirements.  Among the different types of loans available in the market, personal loans and hybrid flexi loans are popular options. While both the options help you fulfil a range of financial needs, a few factors set them apart. These include the nature of the loan, interest rate, disbursal process, tenor, and the repayment mode. 

Read Also: Documents Required for Home Loan Application 

Hybrid Flexi Loan vs Personal Loan: Know the Difference

1. Nature of the Loan

In the case of a personal loan, the lender generally extends the loan amount for a specific period with a pre-determined repayment schedule, usually linked to a fixed interest rate. Once the loan amount is approved and disbursed, the individual can use the funds however they like as there are no limitations over how you spend the loan amount. 

​In the case of a flexi hybrid loan, the lender offers a credit line, approved after the borrower meets all the eligibility criteria. The borrower enjoys the freedom of requesting funds as and when they require it.  

2. Interest Rate 

Personal loans are mostly subject to a specific interest rate charged on the principal amount irrespective of whether it is used or not.  You can calculate your interest rate for personal loan, home loan or loan against property by using an interest rate calculator. 

A hybrid flexi loan, on the other hand, requires the borrower to pay interest only on the amount used. These types of loans offer a lot more affordability and flexibility, as these discount the interest on the unutilized fund. 

Read Also: Loan Balance Transfer from One Account to Other Bank Account 

3. Loan Repayment and Tenor

The disbursal process for a personal loan is simple and straightforward. After the completion and approval of the application process, the lender disburses the approved loan amount to the borrower’s bank account. 

​In the case of a hybrid flexi loan, borrowers can request sums from their loan amount as per their need, leaving the rest untouched for later. This is a more flexible credit option, as it allows you to choose how much to avail of, depending on your requirements.   

Also Read: Tips to Manage Loan Against Property Repayments Efficiently 

4. Loan Disbursal

​A personal loan's disbursal procedure is easy to understand. The lender transfers the approved loan amount to the borrower's bank account after the application process has been completed and approved.

Borrowers can request sums from their loan amount as per their need, leaving the rest untouched for later when it comes to hybrid flexi loan. This is a more flexible credit option, as it allows you choose how much to avail of, depending on your requirements.

Personal loans and hybrid flexi loans, both offer quick and easy funding. One can choose between the two, taking into account their financial needs and their budget feasibility.

​​Documentation Required for Personal Loan and Hybrid Flexi Loan

​​​For those interested in a personal loan or a hybrid flexi-loan, these are the documents they should keep handy. Note that this is an indicative list, and more documentation specifics will be shared with borrowers at the time of application. ​​ 

1. ​​​PAN Card (mandatory) ​​ 
2. ​​​Proof of Address ​​ 
3. ​​​Bank statements of the last 6 months ​​ 
4. ​​​Salary slips of the last 3 months ​​ 
5. ​​​Form 16 or ITR history ​​ 

Conclusion

Both the loans serve the end purpose of offering funds for your personal needs. You can either go for a Personal Loan or a Hybrid Flexi loan - both have their own advantages and shortcomings but that really depends on what your priorities at the moment are.