Flexi loans and term loans are both loans. It is a different matter that both loans are different types. The process of getting both, eligibility and the demand for mandatory documents are different from each other. In Flexi loan, as the name suggests, this type of loan is available under a flexible process. However, the term loan process is not very difficult, but both the loan procedures are different. Let us give you information about Flexi loan and a term loan in this article and make it clear which one to be chosen between Flexi loan and term loan.
What is a Flexi loan?
Flexi loan term has started new in India. This type of loan proves to be very good for those customers who have regular working cash. Whenever money gets stuck with a party, they get to cash in the form of a Flexi loan.
Flexi loans are also called overdrafts. The Flexi loan is a financial facility offered based on the history of the customer’s bank account. A bank account history means that a customer’s bank account is Rs 10 lakh. Every month a transaction is done by that customer from his account. So he can apply for a Flexi loan with the bank if he wants.
The bank will provide a cash limit to the said customer. According to that cash limit, the customer can withdraw money from his bank account whenever he wants. The customer can withdraw money from his bank account even when his bank account is empty. The customer is given a cash limit by the bank, according to that cash limit, the customer can withdraw money. The thing to note is that the interest charged is charged on the money withdrawn by the customer.
Suppose a customer has received a cash limit of Rs 10 lakh as a Flexi loan. But, if the customer withdraws only 5 lakh rupees as per his requirement, then the customer will have to pay an interest rate on only 5 lakh rupees drawn by him.
Flexi loans can also be called as a new way of borrowing money in simple language. Flexi loans are already approved on the bank accounts of most customers. The special thing is that the customer can pay the Flexi loan even before the period.
With this, the customer also gets the facility that he can pay the Flexi loan as EMI if he wants. Even as an EMI, if the customer wants to deposit only the amount of interest rate applicable to the loan in the first year as EMI and from the second year, simultaneously deposit the EMI of the loan + interest rate.
What is A Term Loan?
As the name itself has a term. The term is an English language word. The term in Hindi means period. In this way, term loan means money borrowed for a fixed period which means the amount taken on the contract to return within a certain time is called a term loan. Term loans are mainly of two types:
- A secured loan (property mortgage loan)
- Unsecured loan (loan to be pledged)
Know About A Secured Loan
As you can read, the word secured is attached to this loan. Secured is an English language word. The word secured means secure which means that the loan is safe is called a secured loan. But for whom is it safe? This loan is safe for those who provide banks or NBFC loans.
Meaning when a bank or NBFC pledges a property equal to the amount of the loan before giving the loan, it is called a loan. When the customer taking the secured loan is unable to repay the loan due to any reason, the lending bank or NBFC company collects the money given as a loan by selling the property mortgaged to it.
The special thing about secured loans is that this type of loan has a longer tenure. This means more time is paid to pay the secured amount. A secured loan is mainly a home loan, car loan, jewelry loan, any other property loan.
An Unsecured Loan Means Loan Without Mortgage
This type of loan is an excellent loan option for small and medium level businessmen. Because no property is mortgaged to get such a loan. Loans without pledging are obtained only based on the transaction of the bank account and Form 16 of the ITR of the financial year file.
Unsecured loans mainly include business loans and personal loans. Since small businessmen do not have enough property to expand their business by mortgaging their property, a business loan is a kind of boon for them without mortgaging anything. Because a person can expand his business as per his requirement by availing a business loan without pledging anything.
Which Loan is Better – Flexi Loan and Term Loan?
This article provides important information regarding both Flexi loans and term loans. Both loans are better according to their respective conditions. Flexi loans are a better option for those who deal with money every day. For those who have to buy a house or a car, a secured term loan is a better option. At the same time, for small and medium-sized businessmen, MSME, without any mortgage business loan is the best option.
Also Read: What Are Flexi Loans & How Are They Useful For Small Business?
ZipLoan Receives Business Loans Without Pledging
The country’s premier non-banking financial company (NBFC) ZipLoan provides business loans of up to Rs 7.5 lakh to MSMEs, ie small and medium-sized businesses, without any pledge, in just 3 days *.
The following are the eligibility for Business Loans availed by ZipLoan:
- Businesses must be more than two years old.
- The annual turnover of the business should be more than Rs 10 lakh.
- Must have an ITR file for the business. There should be an ITR file of more than Rs 1.5 lakh in the last financial year.
- One of the houses or places of business should be in the name of the businessman himself or the name of a blood relative of the businessman.
The following documents are required to obtain a business loan from ZipLoan:
- Aadhar Card
- Pan Card
- Last 9 months bank statement
- Copy of ITR filed in the last financial year
- Proof of ownership of one of the houses or places of business. The proprietary proof is valid even if it is the name of the businessman himself or any blood relative of the businessman.
Key Benefits of Taking A Business Loan with ZipLoan
- A business loan is available in 3 days *.
- No property has to be mortgaged.
- A business loan is pre-payment charges free after 6 months.
- 9 Top-up loans are provided to customers who pay EMI on time.