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:

By Haadi