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Henry Githinji
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Flex loans vs Payday loans
“Life is what happens when you are busy making other plans”. In the unexpected situations, you might need to borrow money in certain situations.
There are different types of loans and hence it is important to understand which type would be most suitable for you.
A payday loan is also known as a money advance, salary advance or cash advance. It is usually due on the borrower’s next payday.
Flex loans are a flexible form of funding whereby the borrower may get cash, which they may pay back in installments and over a period of time.
This enables an individual who is operating under a tight budget to maintain a good financial position, without straining their resources.
The similarities of these loans are basically that they are governed by the laws and regulations that advocate for lending practices that are responsible and safe.
The terms and payment plans make these 2 types of loans differ.
Repayment
The amount of the repayments and the period over which they are expected differs between the two types of loans. Flex loans may be repaid gradually over a period of time in payments that are spread over a period of time.
This amount depends on factors such as the lender’s policy and its calculation, based on the state laws as well as a percentage of the borrower’s net monthly income. Payday loans are due when an individual receives their salary.
The borrower should know both the annual percentage rate (APR) as well as the finance charge. The APR is based on the amount borrowed, the interest rate, the length of the loan as well as the credit costs being charged.
Suitable conditions for borrowing the loans
A Flex loan is suitable when you need to cater for unexpected expenses and are not able to repay the amount at once on your next payday.
Payday loans are suitable for someone who has a large income and will be able to pay off the amount borrowed plus interest when they receive their next salary.
Flex loans have a greater advantage in that they offer a quick solution in accessing funds that one may not have at that time.
They also ease the pressure on someone to repay them as there is an option of repaying the amount gradually over a period of time and not using the little pay or resources that one may have at that point in time.
An additional advantage when using the flex loans is that you may increase the amount that you repay should your financial situation improve.
With this information in mind, a Flex loan is arguably the better option when an individual needs quick cash for unexpected needs that may arise.
An online payday loan is good enough for someone who simply needs money to take them through till when they receive their next salary. Flex loans offer one with access to the cash that they need immediately but will need to repay it over a period of time.
They enable an individual with limited resources to cater for their needs in a realistic manner which does not expose them to financial risks.
The immediate expenses will then be covered for over a period of time, rather than taking up a big chunk of one’s expected salary.
Financial planning and stability are possible when one takes this type of loan.
