The Line of Credit that Bends to Your Needs: FlexPay

Sometimes, unexpected needs arise and a traditional loan isn’t the answer. A line of credit provides a convenient solution. It offers flexible financing tailored to your requirements. Where traditional loans come with fixed amounts and repayment schedules, a credit line adjusts to changing financial needs.

For unexpected expenses, investment opportunities, or ongoing projects, this provides access to funds as and when you require them. It empowers borrowers with financial flexibility and control at more favourable terms. The best of use this credit option is its use-based interest calculation. You pay the interest on and when you spend the sum out of your approved credit limit. This makes it cost-effective financing compared to lump-sum loans.

What is A Line of Credit?

It’s a flexible financial arrangement that allows you to access funds up to a predetermined credit limit. Having this, you can keep withdrawing the money as needed, up to the approved limit.

This offers you the freedom to borrow and repay funds multiple times within the predetermined credit limit and tenure. You need not reapply for a new loan each time you need some credit help. Interest is charged only on the amount utilized, making it cost-effective. This financing option works best for managing fluctuating cash needs.

Advantages of A Line of Credit

  1. Flexibility: Flexibility is one of the primary benefits of a line of credit. Unlike traditional loans with fixed amounts and repayment schedules, in this, you get to access funds as needed, up to a predetermined credit limit. You get the freedom to borrow and repay funds multiple times, without the need to reapply for a new loan each time. This flexibility is particularly beneficial for managing fluctuating cash needs, such as unexpected expenses, seasonal fluctuations in income, or investment opportunities.
  2. Reasonable Interest Rates: It comes with more reasonable interest rates compared to traditional loans or credit cards. Besides this, the calculation of interest plays a good role in making this credit option a better deal for you. Since the unused sum attracts no interest, you are not paying anything when not spending the money. This is unlike traditional loans where you pay the interest on the lump sum you get. You can also choose between fixed or variable interest rates, and payment systems depending on your preferences.
  3. Credit Building: It comes with the potential to build or improve your credit history and credit scores. With timely repayments and responsible credit utilization, your credit score improves and it becomes easier to qualify for better terms and conditions on credit options in the future. Financial responsibility and reliability play a key role in strengthening your creditworthiness. This is especially beneficial for people or businesses looking to establish or rebuild credit. It can be a more structured and manageable way to demonstrate your creditworthiness over time.

Line of Credit & Its Types

  1. Unsecured Vs. Secured Credit Line: An unsecured line of credit does not require collateral. It’s based on your creditworthiness and good credit behaviour in the past. It’s a flexible and convenient credit facility but sometimes comes with higher interest rates and lower credit limits. Albeit, a secured line of credit needs collateral for approval. These collaterals can be a savings account, certificate of deposit, or valuable asset. It often has lower interest rates and higher credit limits. It’s more suitable for you when you have less-than-perfect credit or are seeking larger loan amounts.
  2. Revolving Vs. Non-Revolving Credit Line: A revolving line of credit allows you to borrow, repay, and reborrow within the predetermined credit limit. It offers you an ongoing access to funds. It saves you from reapplying for a loan from scratch every time you need some credit help. Whereas a non-revolving line of credit provides a one-time fund. It’s similar to a traditional loan. Once you get the money, the credit line closes. You have to reapply for a new line of credit if you need more money.

What to Be Careful about while Using a Line of Credit?

To save from any potential financial pitfalls, be mindful of borrowing more than you can repay easily. Excessive debt could lead to financial strain while also damaging your credit score. Pay attention to interest rates and fees, and make on-time repayments to maintain a positive credit history. It also saves you from penalty charges. Responsible use of a Line of credit remains a valuable financial support rather than a burden.

Effect of a Line of Credit on Your Credit Score

A line of credit can cast both positive and negative impacts on your credit score, depending on how responsible you are with it. It can help improve your credit score by demonstrating responsible borrowing behaviour and having a diverse credit mix.

On-time payments and maintaining a low credit utilization ratio also help in improving your credit score. It shows that you can manage credit responsibly. However, doing the reverse of all these can hamper your credit score. Maxing out your credit limit, late payments, and high credit utilization ratio can damage your credit score and decrease your creditworthiness as well.

Whereas, failing to make payments on time or maxing out your credit limit can have detrimental effects on your credit score. Late payments can lower your credit score, while high credit utilization ratios can indicate financial strain and negatively impact your creditworthiness. When you have many open lines of credit, this too lowers your credit score.

To maintain a healthy creditworthiness and gradually build your credit score, it’s essential to understand the factors that influence your credit score. It helps you make an informed and wise decision while also helping in the responsible use of credit.

FlexPay Line of Credit

It is a loan offering from Vivifi India Finance Private Limited, a non-banking finance company (NBFC) registered with the Reserve Bank of India (RBI).

Since 2017, Vivifi India Finance Private Limited has been instrumental in helping Indians cover their cash crunches, using its product FlexPay.  It is a line of credit that provides flexibility during disbursement and repayments keeping in mind the challenges faced by salaried professionals.

It offers a convenient digital experience offering instant credit ranging from Rs. 500 to Rs. 3,00,000 with flexible repayment terms. The paperless credit journey makes your loan approval much faster in an end-to-end encrypted digital environment.

This works as an ultimate credit option to meet your different, multiple and discrete monetary needs – from making merchant payments to sending money in times of need to your loved ones.

Being a line of credit and an unsecured credit option sets it apart from any traditional loan. Here, interest accrues only on the amount utilized. It eliminates the burden of lump-sum interest payments irrelevant to usage. You can use this as a funding cushion. Utilize, repay and improve your credit score while eliminating any fund shortages.