What Are Flex Loans?
Flex loans are an entirely different form of financing from regular personal loans at banks or online lenders. Instead, they are unsecured lines of credit that allow you to receive a cash advance from a special purpose facility.
In essence, you can borrow as much cash as you need and withdraw money at any time. This option is quite desirable for borrowers with a bad credit score as flex loans mostly require only a soft credit check.
Flex loans are accessible from a wide range of cash advance agencies, credit unions, and online lenders. Since it is unsecured, lenders will also not require you to provide collateral. However, the interest rates for this financing are usually much higher than your average personal loan.
How Does Flex Loan Work?
Most times, flex loans operate like credit cards, allowing you to access a line of credit from a lender. You can borrow as much as is allowed by your credit limit and withdraw the cash whenever you need it.
Borrowers can also repay anytime, either by paying off a partial or full value on the loan during its duration. Besides, flex loan operators only charge you interest on the actual amount you withdraw and repayment balances each month. However, if you’re opting for a flex loan, take note that it is rather costly compared to most other short-term financing options.
Nevertheless, unsecured lines of credit remain a good option for emergencies or unusually high bills you can’t clear out until the next paycheck.
How Much Do You Want?
What Are the Basic Requirements for Getting a Flex Loan?
To qualify for a flex loan, you’ll need to be a US citizen and be at least 18 years old. You should also have a bank account in your name and be able to show evidence of employment. Lenders require this information to assess if you have a stable source of income to repay your loan.
How Much Does a Flex Loan Cost?
Flex loans are without a doubt considerably expensive, especially when compared to other financing methods like credit cards and personal loans. This is all because of its enormous interest rates and lender fees charged on the line of credit. A cumulative of all fees and rates on the flex loan typically results in an APR north of 200%.
However, the true cost of your flex loan will be determined by the total amount that you borrow, the repayment conditions, and the interest rate. Generally, borrowers with a better credit scores may get better terms on their loans compared to those with a poor credit history.
In addition, choosing to make only the minimum payment each month may extend the repayment period and thus increase your total interest.
Pros and Cons of Flex Loans
Like with every form of financing, flex loans come with their own benefits and disadvantages. So, deciding to opt for this line of credit should have you weighing all the pros and cons. Below are some of the perks and drawbacks of taking out a flex loan.
Here are some of the most common advantages of taking flex loans.
Swift and convenient application process
Applying for a flex loan is stress-free and easy to complete. All it takes is for you to fill out an online form with brokers, which takes only a few minutes. Afterward, the company will forward all your details to potential lenders. You don’t have to break a sweat or visit any physical store.
Taking a flex loan with lenders means that you can receive cash in your bank account as fast as the same day. As soon as your application is approved by a lender. You don’t have to wait endlessly to be credited. You can also access your funds anytime you like.
No Credit Score Requirements
Borrowers can take out a flex loan even if they have a poor credit score. Most lenders and cash advance companies are generally more concerned about your repayment ability. So, they tend to place more emphasis on proof of a stable source of income than your credit history.
Suitable for Emergencies
Most flex loans are a good option if you have medical, vehicle, or educational emergencies that need to be sorted out before the next paycheck. This type of financing offers you access to the amount you need and is made available to your account instantly to cover your urgent need.
Flex loans also have quite significant drawbacks that we highlight below.
Most flex loans bring along with them high-interest rates and a truckload of fees. Most of the time, the entire APR may be higher than 200%, depending on the fixed interest and payment duration. It’s advisable to compare more offers and stick to a relatively cheaper option.
High Possibility of Indebtedness
As helpful as flex loans may be in paying up emergency bills, they could also drag you into an unintentional cycle of debts. Withdrawing cash from the line of credit is quite flexible and could push you to take out more than you can repay.
Besides, the more you borrow, the higher your APR, and consequently, your debt. So, it would help to check your spending and pay it back as soon as possible.
Alternatives to Flex Loans
Given the expensive nature of flex loans, you may want to consider alternatives before making a loan request. Below is a list of options offering financial solutions with a considerably lower interest rate than most flex loans.
Payday Alternative Loans
Payday Alternative Loans (PALs) are a lower-cost form of conventional payday loans. This type of financing gives you cash in the short term to cover basic living expenses. PALs are mostly issued by credit unions belonging to the National Credit Union Administration.
Generally, you can get up to $1,000 from PAL lenders for repayment lasting up to six months. The interest rate is significantly lower compared to flex loans and payday loans. However, you may need to pay about $20 to apply for most payday alternative loans.
A personal loan is a type of unsecured financing gotten from a bank or an online lender. This type of loan allows you to borrow a large amount of money and pay it back in fixed monthly installments. Most repayment plans for a personal loan may last between two to seven years.
You can find competitive rates from our long list of personal loan lenders here at US Installment Loans. Simply click here and apply for a personal loan.
This is a cash advance drawn on your credit card. Like flex loans, a credit advance gives you access to a line of credit and allows you to borrow from your card’s balance. You can get a cash advance on your credit card from a bank or an ATM. Besides, you can also get a cash advance with US Installment Loans as well.
Borrow Money from Family/Friends
Taking an informal loan from friends and family is perhaps the best option if you are looking to avoid the harsh sting of interest rates. Borrowing from family and friends is fast and convenient. And it also takes off the stress of filling out forms and signing paperwork.
Besides, you can agree on a suitable repayment date without incurring excessive debts. You do not need any type of collateral or security for this type of loan. Nonetheless, it is advisable to maintain trust by repaying in full and doing so as swiftly as possible.