Flexi Loan vs Personal Loans – Know the Differences

Posted on Thursday, February 27th, 2025 | By IndusInd Bank

Many financing options have come up in the last few years. While personal loans are a familiar option for many, one alternative many people may not be aware of is a flexi loan. It is a type of credit facility where the borrower can access funds up to a pre-approved limit. 

While a personal loan provides a lump sum amount with fixed EMIs, flexi loans allow you to borrow as per your requirement within the given limit. If you are confused between the two, choosing the right option depends on several factors, like repayment flexibility, interest costs, and the urgency of funds.

Let’s explore the major points of difference between flexi loans and personal loans to help you decide the right option.

What is a Flexi Loan and How Does it Work?

To better choose between a flexi loan vs a personal loan, you must first understand how the former works. 

A flexi loan is a unique type of credit facility where the borrower gets access to a pre-approved loan limit. They can withdraw funds as and when needed. Unlike regular loans, you only pay interest on the amount you use and not the entire approved loan amount.  

How Flexi Loans Work:

1. The lender approves a credit limit based on your eligibility.  
2. You borrow any amount within the approved limit as and when required.  
3. The interest is charged only on the amount withdrawn, and not on the unused balance.  
4. You have the option to repay the outstanding amount as and when you can. 

A Quick Glance at Personal Loans

A personal loan is an unsecured loan. Here, the borrower receives a lump sum amount and repays it in set monthly instalments over a fixed tenure. The bank charges the interest on the entire loan amount from the beginning. The EMIs, too, remain constant throughout the repayment period.  

For those with a clear financial goal, such as a wedding, travel, or education, a personal loan is a reliable option.  

Now that you know the basic difference between a flexi loan and a personal loan, let’s explore the other differences as well. 

Flexi Loans vs Personal Loans

Here’s a detailed comparison between flexi loans vs personal loans: 

Both options cater to different needs. Hence, choosing between a personal loan vs. a flexi loan depends on your financial goals and spending patterns.  

Flexi Loans vs Personal Loans – Which One to Choose and When?

To decide between a personal loan vs. a flexi loan, you must assess your financial requirements and repayment capacity.

Choose a Flexi Loan When:

1. Your expenses are unpredictable, as a flexi loan offers flexibility.  
2. You need funds over time for ongoing expenses like home repairs, medical bills, or business needs. 
3. You want to pay interest only on the amount you use for your short-term needs.  
4. You want the option to repay in smaller amounts.

Choose a Personal Loan When:

1. Your requirement is set for a clear purpose, like a wedding, holiday, or education.
2. You want predictable EMIs and a structured repayment plan. 
3. Your needs are long term, requiring larger amounts.
4. You want quick access to all the funds to ensure all your expenses are covered immediately.  

Before you make the decision, use tools like the personal loan EMI calculator to estimate your EMIs and choose the most affordable option.  

Also Read: Instant Personal Loans- A Convenient Answer to Your Financial Requirements

Conclusion

Both flexi loans and personal loans offer unique benefits which can be suitable for different financial needs. Flexi loans provide flexibility and cost efficiency. On the other hand, personal loans are ideal for fixed, one-time requirements with structured repayments. Making a thorough personal loan vs. flexi loan comparison can help you make the right financial choice. 

If personal loans are what you are looking for, explore IndusInd Bank’s Personal Loan offerings. Our Personal Loans come loaded with flexible features – you have the freedom to choose the loan amount you want, decide the tenure you want, and finalise other repayment aspects as well, as per your financial needs. So, apply now for a Personal Loan today! 

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.