To get the right flexible loan 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, and you can choose between:

  • More flexible repayments

  • More flexible borrowing options

Flexible payments

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

  • Overpayments are where you pay extra money towards your loan to reduce the interest you are charged and clear the balance quicker.

  • Early repayments are where you pay off the outstanding balance of your loan early. Some lenders allow early repayments for a fee but others offer loans with no early repayment charge.

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

Flexible borrowing

Some loans offer flexible borrowing 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 you have 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 have 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 payments you want

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