One of the rising loan options out there, an online flex loan is a higher cost loan that comes with many qualities which make it the go-to choice for emergencies. Off late however, there is a chatter in the market, about how a lot of borrowers tend to start using such a loan on a routine basis given the convenience they find in the borrowing process associated with most such loans. In 2019, one study found that a significant number of borrowers that contributed to the growth of online flex loan, were performing routine borrowing transactions for needs that were not exactly urgent. We at CashAmericaToday, dedicate our services to being borrower-friendly and we believe it’s important for us to use our means of reaching out to our customers and potential customers, to help spread awareness about the right uses of such loans.
Understanding Online Flex Loans
Online flex loans are known to be amongst the most flexible form of payday loans, which are particularly easy to qualify for and acquire. For those who need a simple introduction, a payday loan is much like what the name suggests – a very short term loan which is typically set to be due along with applicable charges, on the borrower’s next payday, given that that lies within a set period of time – usually 7-14 days ahead of the disbursement date. Such a loan is usually quick at paying out, which makes it a high risk loan (due to limited feasibility of a complete credit and payment ability verification). The two factors – a very short term and high risk lending – are what lead to payday loans being a high interest rate loan. The high interest rate doesn’t necessarily translate to a very high cost given the limited number of days that the interest is applicable for.
A flex loan is a payday loan that is flexible in the repayment terms. Instead of the typical 7-14 day period, when a borrower needs a repayment window that’s longer than that, some direct lenders offer such an option and tend to term it as a flex loan or an installment payday loans.
The reason online flex loans are doing great, is primarily the nature of these loans and whom they appeal to. Since flex loans are higher cost loans which are easily available and repayable in parts, it is quite understandable that people in a real emergency will make up for the largest number of borrowers. Such emergencies are best served by online services which do not create the need to move around in hunt for a loan. Nonetheless, applying for a loan from a trustworthy and legitimate lender is key and we address this topic ahead too.
Here’s a link to an example of an online flex loan. CashAmericaToday is one of the most experienced direct lending services offering flexible repayment options that are automated to suit your convenience.
What makes them Expensive
As discussed in the previous section, flex loans are a type of payday loans. Being high risk loans of short term, these tend to be higher in the interest rates than loans that are not of such a nature.
However, high interest alone is not enough to make a loan expensive. It is the combination of a high interest and a longer period of due principal amount that makes a loan more expensive. Since these payday loans can last from 3 weeks to 6 months, the amount that the applicable interest rate can add up to, can be quite significantly higher than a typical payday loan or a bank loan that may be comparable in terms of the length of time it’s borrowed for.
That said, there are times when a direct lender offers lower interest rates for a longer term loan, to make the deal more attractive to the borrower. If you choose to borrow a flex loan, you could check for such options with your lender prior to confirming the deal.
How to Manage Repayment
When considering and deciding a loan repayment schedule, there are a few factors one must keep in mind:
- Choose the shortest comfortable repayment term: If you know that you have the ability to safely repay a loan in 3 weeks, taking one for 4 weeks is simply not worth the added extra interest amount. As long as you know you can definitely repay loans by a particular date, it is best to choose that date and nothing beyond as each day shall cost. If however, a date seems less certainly manageable, waiting to get penalized for delays is not the right way to handle the situation –the borrower must either take a loan for the right length of time or apply to extend the loan when extension is available as an option.
- Keep your other due dates in mind: You may have credit card dues, pending invoices and other scheduled due dates and none of these can be overlooked when planning a loan’s repayment schedule as your income has to suffice for paying it all. All delayed payments are costly at different levels.
- Repay more, sooner: Some direct lenders, allow absolutely flexible repayment where if you pay a larger amount early, the interest would only be applicable for the remaining days on the rest of the outstanding principle amount. It is important to know your loan terms well and if such a term is available, you could be saving significant amount of money by making largest possible repayments at the earliest convenient date. Beware that some direct lenders may need you to inform about such repayments, for it to reflect on your loan outstanding amount for the benefit to be made available to you.
What to Avoid when taking Flex Loans
Flex loans are non-bank direct lender payday loan derivatives which allow enhanced repayment terms versus traditional payday loans. However, some traits of payday loans are inherent to them and some traits are exclusive to flex loans. The same stands true for associated risks of the loans too. There are ways to mitigate such risks and here we discuss the key issues/actions one must avoid while taking a flex loan:
- Borrowing from just any lender without any homework: When taking a non-bank direct lender loan of any sort, it is absolutely important to do a little bit of research to ensure your lender is legitimate and reputable. Reading through some online reviews and looking out for accreditations of the lender’s business on their website, could make all the difference that you may need.
- Borrowing a payday loan for a longer term than you need: In very short term loans, each day costs. When you take a flex loan and you’re sure of exactly how long you shall take to repay, it is absolutely the right choice to take your loan for just that much duration.
- Choosing flex loans over other feasible options that are cheaper: Is any other cheaper loan available to you and can it serve you just as well? If you’re choosing a specialized flex loan just because it’s easier to apply, that’s probably not the right reason to be choosing this expensive loan product.
- Borrowing more calculating that the loan amount can be used for the first few repayments: A lot of borrowers choose loan amounts eyeing the possibility of utilizing a part of the loan amount to repay the loan. This is probably the easiest way to make you loan enormously expensive. Instead, taking a smaller loan with a schedule of repayment starting later, can serve the same purpose, still being a little cheaper.
- Borrowing when there’s no need at all: As said before, these are loans designed for urgent needs/emergencies. These aren’t intended to be a loan for general use and using it that way, can be a very expensive decision.
- Getting stuck in a debt cycle: A debt cycle is when a borrower falls into a situation when there’s an endless chain of debts which overpower the sources of income, leading to continuously remaining in debt that also increases with time. Being in this situation is not just financially damaging but also very stressful. It is absolutely essential to understand this fact and ensure it doesn’t turn into a reality for you, ever.
Keeping the Right Sources Bookmarked
Some borrowers who are in a financial position that wouldn’t yet allow savings to be maintained for emergencies, end up needing to use flex loans frequently. One good practice in such a situation, is to know which lenders are right and keep them bookmarked in browsers. That way, instead of doing a fresh search each time, there’s the easier choice readily available, to head to bookmarks and then straight to the link of a service that has previously been verified for being genuine and reliable.
If you’d like to do so, you could check out our services at CashAmericaToday and bookmark he website for your future convenience.
Flex Loans for Bad Credit Borrowers
When a bad credit history borrower looks for a loan, the options usually available are only very short term loans. This is simply because only in such terms, is the income a comparably relevant indicator of how safe it would be to lend the requested sum of money to the borrower. However, some direct lenders do go that extra mile to offer flex loans for bad credit borrowers.
Keep in mind that any loan you take as a bad credit score holder, is likely to put you at a greater risk than the same loan would correspond to someone with a healthier credit score, as your credit history is being overlooked for such a loan’s decision. This in simpler terms, means that if you have a bad credit score, you need to be more cautious while taking a loan.
Once you know that your decision is safe and you wish to apply for a bad credit loan that comes with a guaranteed approval, you could use our link and read through the features of the loan or just apply for the loan directly.
Why use the Loans only in Emergencies
As you would’ve noticed by now, flex loans are useful in many ways but end up adding to be expensive derivatives of payday loans as the longer term accrues more interest. This added expense together with the rather easy application process is a combination that can make a risky loan still be attractive. This is what makes it absolutely important for the borrower to be cautious while choosing such a loan and hence it is important to be kept as an option only for emergencies when money is a must and other option are simply not seeming viable.
