Can Flexi Business Loans Result In Lower EMI Amounts?

One can get funding with flexible business loans as per their requirements. Read on to know how you can pay lower emi amounts with IIFL flexi business loans.

27 Aug,2022 09:26 IST 16 views
Can Flexi Business Loans Result In Lower EMI Amounts?

Capital is one of the fundamental requirements to run a business. Thus, you may require working capital infusion regularly to expand, renovate, or buy a new asset or equipment. You can easily access funding with flexible business loans for short-term or long-term requirements. A Flexi business loan is a popular option, and this article emphasizes the advantages of these loans.

How Does A Flexi Business Loan Work?

A Flexi Business loan is a credit facility where you receive the loan amount for a pre-decided tenure, and the interest rate applies to the amount used. The business loan interest rate varies but is generally lower than term loans offered by banks and financial institutions. Thus, this loan is a more flexible option than loans that have a fixed term.

What Are The Advantages Of A Flexi Business Loan?

• You can prepay a Flexi business loan. For example, if you have received a loan for Rs. 10 lakhs and require Rs. 6 lakhs, you can prepay the borrowed amount before the tenure ends. This payment strategy lowers the EMI amount payable.
• If the need arises, you can borrow from the predetermined limit of your loan account as long as you do not exceed the total sanctioned amount. Thus you do not need to apply repeatedly for a new loan.
• The interest applies only when you use the funds. In the above example, you will need to pay interest when you borrow Rs. 6 lakhs out of the sanctioned amount.
• No interest is applicable on part prepayment of the borrowed amount.
• Flexi loans have lower interest rates as compared to traditional business loans.
• The Flexi loan process requires minimal documentation requirements, making the entire process of loan disbursal hassle-free for the borrower.
• Some providers offer collateral-free Flexi business loans. A good credit score will ensure that you secure an instant business loan easily.
• You can avail of tax benefits as the EMI amounts to repay business loans are tax deductible.

Pay Lower EMI Amounts With Flexi Business Loans

Flexible repayment terms make it convenient for the business to choose this loan type. You can pay monthly installments for the amount withdrawn from the loan account. You can defer the principal amount repayment with interest, thus cutting down the actual installment by 50%.

Let’s consider an example to understand the difference in the EMI payable for a Flexi business loan vs a term loan.

 

Term Loan

Flexi Loan

Loan Amount (in Rs.)

5,00,000

5,00,000

Interest Rate

14%

14%

Tenor

4 years

4 years

Monthly Installment Amount (in Rs.)

11,634

5833

For a term loan, the EMI includes both the principal and interest rate. However, the EMI for a Flexi Business loan is calculated only on the interest payable. You can repay the principal amount at the end of the tenor. Thus, you pay lower EMI amounts with Flexi business loans.

Apply For A Flexi Business Loan With IIFL Finance

If you are looking for a loan to fulfill the capital requirements of your business, IIFL Finance Flexi Business Loan is the right solution for you. The loan application process is smooth, and you can enjoy the flexibility to use the amount as per your needs at attractive interest rates and pay when there is a surplus.
Our product is specifically designed to match your business requirements and is best among the similar category of loans offered by our peers. Finance your business plans easily with IIFL Finance Flexi business loans.

Frequently Asked Questions

Q.1: What is a Flexi Business Loan?
Ans. A Flexi Business Loan allows the borrower to withdraw funds up to a preapproved limit when required and repay the loan as desired. This way, it offers more flexibility and enables the business owner to deploy funds for business requirements.

Q2. What are the documents required for a Flexi Business Loan?
Ans. The documents required for a Flexi Business Loan include a PAN card and Aadhar card. Additionally, business vintage proof of a minimum of 2 years and bank statements for 6-12 months are also needed depending on the loan amount. GST with a minimum of two years vintage is also required for higher loan amounts.

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