What is an Online Flex Loan?

Published on July 10, 2020 by Daniel Azzoli

smiling man in black glasses sitting at wooden desk next to open laptop researching an online flex loan

Getting flex loans online may add wiggle room to your budget in emergencies, but they usually come at a high cost for most borrowers.

When it comes to your budget, a little flexibility may be a big advantage. It gives your finances some breathing room, so you aren’t caught unprepared should an unexpected expense wind up in your mailbox. It may also give you a chance to take advantage of investments and other ventures.

But flexibility can be a hard thing to come by, especially for the 49 percent of respondents of a GoBankingRates survey living paycheck to paycheck.[1] For some, flexibility may not be a built-in feature of their budgets, so they may look for it in something like flex loans online.

Flex loans may be a convenient way to get cash on a faster timeline, but like most things in life, there’s a catch. High interest rates are par for the course, so they may be an expensive way to borrow.

What Are Some Features of Flex Loans Online?

Before we dive into the potential benefits of online flex loans as well as the things to look out for, we should start by defining what they are in the first place. So, let’s take a look at some of the most important features of these types of loans.

1. Small Loan Amounts

Flex loans online usually come with a lower borrowing limit. This could range from a few hundred dollars to a few thousand.

2. Eligibility

Online flex loans may be available even if you have bad credit. While online flex loans direct lenders may still check your credit if you apply, they may assess other areas of your finances to determine if you qualify.

3. High Fees

As a result of flexible eligibility, some online flex loans direct lenders may apply interest rates and finance charges that equate to a high Annual Percentage Rate (APR). Be careful; these could be triple-digit APRs.[2]

4. Unsecured Loan

The word unsecured simply means you don’t have to supply collateral (a valuable belonging) to back your loan when you apply for it. Your rates, terms, and conditions are based off your financial details, such as your credit score and income.

5. Credit Limit

Rather than receiving a lump sum of money upfront, you get a credit limit. This is a pre-set amount of money which you may borrow as needed — whether it’s all at once or over a series of smaller draws.

6. Pay What You Use

Your payments are based off your use plus any applicable interest and/or fees — not the total line of credit limit you’re given.

7. Ability to Redraw

Each draw ties up a portion of your line of credit limit, so the more you use, the less credit you have available. Paying your loan in full frees up your limit, and you may draw up to this pre-set amount.

Are There Benefits to Using Flex Loans Online?

Yes, there are some advantages to getting flex loans online. Here are some of the reasons why people might use these products in an emergency.

person holding takeout coffee cup with checkmarks in boxes in front of of a plant.

1. Faster Application Process

In some cases, online flex loans direct lenders can connect you with the cash you need quickly. Usually, online loans work on a faster timeline than options you get at a storefront financial institution. Online loans can automate many of the steps involved in lending money, including the application process and disbursement of funds. 

Worried all this tech means online flex loans direct lenders will treat you like a number? This may be a factor that stops people from applying for line of credit loans – along with these other misconceptions about online loans.

But it’s wrong. While there’s quite a bit of automation happening behind the scenes, there’s generally still a human element with most financial institutions. Customer service representatives will be overseeing your loan account at every step of the way, so there will always be a real person to talk to.

2. Flexible Payments, Not Fixed

Paying off a flex loan generally works differently from some types of personal loans. Rather than paying back your principal plus fees and/or interest over a pre-set number of fixed payments, you’ll receive a billing statement. The amounts on this statement are based on the draws you make and not the full limit you have.

You may also have the option to make a minimum payment. This is usually a small portion of your balance, and paying it keeps your account in good standing.

3. Flexibility to Request Draws

With some personal loans, you receive your full loan amount all at once. With a flex loan, you receive a credit limit. If you don’t need to tap into your entire limit at once, you don’t have to — you may wait to borrow more.

This might make it an option if you aren’t sure how much an unexpected emergency repair will cost you. You can draw against your limit to pay the initial bill, knowing you have more to tap into in case you need to do more work.

4. Eligibility Criteria

A high credit score is often a prerequisite for borrowing money. There are a lot of financial institutions that require their borrowers to have a prime score before they’re willing to lend them money. Ordinarily, this may make it hard if you need to borrow money with a subprime score.

With some online flex loans direct lenders, your credit score isn’t the only determining factor when reviewing your application. They may look to your ability to repay the loan (that is, your pay schedule, income, and current debt load) to determine if you can handle a flex loan.

It’s important to check your credit score any time you plan on applying for a loan. Knowing what your score is may help you look for the best fit for your financial profile. 

Are There Things to Look Out for When Using Flex Loans Online?

With every financial product, there are some things you need to look out for. Just as there are pros and cons of an online line of credit there are benefits as well as things to be careful of when looking at online flex loans.

Make sure you understand the possible consequences of using flex loans online before you apply.

1. Cost

The rates you pay may vary from lender to lender, as well as state to state. They may also fluctuate according to your credit score depending on the financial institution.

They may check this score to assess your creditworthiness, which tells them the likelihood you’ll pay your loan back on time. Having a lower score may label you as a risk.

If lenders don’t reject you outright, they may offset this risk by setting higher interest rates. There may also be instances where your rates aren’t affected, but the loan amount you qualify for will be.

Like many line of credit loans for people with bad credit, interest and/or fee rates for flex loans online may be high. The higher your rates climb, the more you’ll owe to online flex loans direct lenders.

The more you owe, the harder it may be to pay back without budgeting carefully.

2. Temptation to Only Make Minimum Payments

Any time you can pay less than you have to sounds like a great strategy for your finances, but it’s a bad idea when it comes to a loan or line of credit. If you make the minimum payment, it’s just a small portion of what you owe. While paying it will keep your account in good standing, it won’t make a substantial dent against your loan.

In some cases, you may also earn more interest by carrying over a balance between billing statements. Over time, this added interest will increase what you owe.

Another downside is how it ties up your credit limit. If you don’t pay down your balance each month, you’ll have less available credit to use in the future.

3. The Temptation to Borrow More

A line of credit or credit card are both a type of revolving credit. This means that as long as you keep it open and pay off your balance, your credit limit will be available. A flex loan falls into this category.[3]  

Knowing you have a flex loan available waiting in the wings can be hard to ignore. You might be tempted to use your flex loan online more often, for things you don’t need. If you don’t budget for these purchases, you may rack up debt you can’t manage.

back of women’s head in front of open laptop on a desk.

How to Find Online Flex Loans Direct Lenders?

Here are some tips to help you find flex loans online.

1. Research Your Lender

Applying for money is a big decision, so you should know the kind of lender you’re getting into business with. Spend some time on their website to see what they offer and at what rates. More importantly, check that they are legitimate financial institution.

If a lender passes this initial test, look up their online reputation. Past customers may have a lot of insights into the way they do business. This may give a different impression of a lender, gleaned by people who have actually borrowed from them before.

2. Compare Rates and Conditions

The rates, terms, and conditions will tell you everything you need to know about a flex loan. How much interest is applied and when, how often you’ll have to pay, and any additional fees or charges that come with it. You’ll have to do this for every lender you research to make sure you make an informed decision.

3. Have a Purpose

You should know why you’re applying for a loan. Once you have a specific idea of what type of loan you need, this can help narrow down your list of potential lenders.

4. Apply for the Right Reasons

Due to the high cost of borrowing, you should only ever use flex loans online in an unexpected emergency. In other words, use these products as a last resort when you have no other options. More still, only ever borrow them when you need help covering an unexpected emergency such as an auto repair, home repair, or medical expenses.

Put fun purchases or cosmetic upgrades on hold until you can save up what you need. checking out these tips for building your credit history as you wait.

Limiting how often you borrow may help keep more money in your pocket, as you won’t have to pay interest and other charges.

two smiling women sitting at table next to open MacBook in office.

How Do You Know if Flex Loans Online are Right for You?

You won’t know if flex loans are a good fit until you sit down with your budget, so roll up your sleeves and get ready to crunch some numbers. Once it’s all said and done, will you be able to afford your payments without jeopardizing other financial obligations?

If the answer is no, it’s time to go back to the drawing board. If it’s yes, then it might be time to start looking into finding online flex loans direct lenders available to you.

If you have any questions about what we do here at CreditFresh, get your questions answered here! Feel free to reach out and someone from our Customer Service team is always happy to help.

Disclaimer: This article provides general information only and does not constitute financial, legal or other professional advice. For full details, see CreditFresh’s Terms of Use.


[1] https://www.gobankingrates.com/saving-money/budgeting/americans-living-paycheck-paycheck/

[2] https://www.creditkarma.com/personal-loans/i/what-is-flex-loan

[3] https://www.experian.com/blogs/ask-experian/what-is-revolving-credit/