Flexible Loans: Compare loans with no early repayment fee

Compare these loans that offer more flexible repayment options like overpayments, payment holidays and repaying the balance early.

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Last updated: 16 June, 2021

How to get the right flexible loan

Regular loans can feel restricted and inflexible, but a flexible loan could give you the freedom you’re looking for.

To get the right flexible loan for you, you need to think about which benefits you want, and which you can do without.

Most personal loans let you borrow a lump sum upfront and pay it back over a set period of time. Some offer more flexible terms. You could either get:

  • More flexible repayments

  • More flexible borrowing options.

What type of loan is right for you? 

Flexible repayments

If you want to pay extra, take a break or pay less towards your loan, some loans let you do just that.

You could benefit from:

  • Overpayments. These are where you pay extra money towards your loan, over and above what was agreed. It means you can reduce the interest you’re charged and clear the balance quicker. 

  • Early repayment. This is where you pay off the outstanding balance of your loan early. All lenders allow early repayment, but most will charge you a fee. More flexible loans won’t have any early repayment charge at all.

  • Payment holidays. These are where you take a break from your loan payments for a set period. Only some lenders offer this option. You’ll still be charged interest on your loan balance while you take a break from making payments.

With loans taken out after 1 February 2011, banks can’t you for making overpayments unless the overpayments total more than £8,000 in a year. That’s the case even if you have a standard loan, rather than a flexible one.

Find out more about your repayment options here.

Flexible borrowing

Some loans offer flexible borrowing. This is where you can withdraw money, up to a set limit, as and when you need it. These loans are sometimes called Flexi Loans.

Flexi loans can be useful if you are unsure exactly how much you need to borrow, because you are only charged interest on the amount you withdraw.

You transfer money from your loan into your bank account, and then make payments based on the total amount outstanding.

However, because there are fewer of these types of loans in the market, you may find that the interest rates they offer are higher.

Getting the best loan

Once you’ve decided what flexibility you need, look for a loan that:

  • lets you borrow the amount of money you need

  • has the lowest interest rate

  • offers the flexible borrowing or payment features that you want

Then check your credit record is accurate and that you meet all the lender's application rules before you apply.

Here’s how to apply for a loan.

If I have bad credit, can I still get a flexible loan?

If your credit history is poor and your credit score isn’t great, getting a cheap loan can be tricky. When you take out a loan, your credit score is looked at. Even if you can get a loan, lenders are likely to charge you a much higher interest rate than they would if you had good credit history.

However, if you can get a flexible loan, it could be a good way for you to borrow money. The ability to take payment holidays can be helpful. Plus, the chance to make overpayments could save you money. And you could improve your credit score, too.

You should always think carefully before taking out a loan of any description. Make sure you can afford the repayments, or you could make your credit score worse if not.

What do lenders look at when you apply for a flexible loan?

Many lenders will look at:

  • Your credit history

  • Your salary

  • How long you’ve been a customer.

Flexible loan FAQs

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