Flexibility is a common loan feature borrowers look for when it comes to choosing a loan, which is why flex loans are an attractive financing option. With this loan type, you have more flexibility when it comes to your loan term, loan amount, and prepayments, among others. Keep reading to find out more about flex loans and how they may help you with your financial needs.
Key Points
- A flex loan is a type of short-term installment loan that offers more flexibility than a typical loan.
- Flex loans are offered by alternative lenders who have less strict loan criteria.
- You can customize your flex loan in a number of ways, including the loan term, early prepayment, payment schedule, and loan top-ups.
What Is A Flex Loan?
A flex loan is similar to a typical short-term installment loan, but with some added flexibility. Depending on which lender you decide to work with, you can expect increased flexibility in one or more of the following features:
- Payment schedule. Your lender may provide you with the option to choose from weekly, bi-weekly, monthly, or semi-monthly payments.
- Prepayment options. Most lenders charge a fee when a borrower wants to pay off their loan ahead of schedule. With a flex loan, many lenders allow their borrowers to make prepayments, penalty-free.
- Loan top-up. Because a flex loan is so flexible, many lenders offer the option to top up a loan should a borrower need access to more money.
- Customizable terms. Depending on your budget you may want to choose a pay off your loan quickly or over several years, flex loans can afford you this option.
Flex loans are simple, straightforward, and user-friendly and can help any consumer who is currently looking for a financing option that will work with, instead of against, their finances.
Borrow Up To $50,000
Where Can You Find The Best Flex Loans In Canada?
Flex loans are offered by smaller alternative lenders who often conduct their business online. These types of lenders have less strict guidelines compared to traditional lenders and thus are able to offer flex and bad credit loans.
Filters
- Amount
- Up to $35,000
- Rate
- 9.99% – 34.95%
- Term
- 9 – 78 Months
- Amount
- Up to $60,000†
- Rate
- 19.99% – 34.99%*
- Term
- 6 – 120 months
- Amount
- $500 – $10,000
- Rate
- Up to 34.99%
- Term
- Up to 60 months
Steps On How To Get A Flex Loan In Canada
To find and apply for a flex loan, follow these steps:
Step 1: Compare Lenders
Use an online loan aggregator to quickly find lenders that offer short-term flex loans. You can then compare them side-by-side to see how they stack up against each other. This will help you find the lowest rates and best terms, which can lead to savings and easier-to-manage payments.
CompareHub can help you quickly and easily find and compare lenders. Then choose the one that offers what you’re looking for.
Step 2: Check Your Credit Score
If the lender conducts credit checks, you’ll want to know what your score is by pulling a copy of your credit report. Reviewing your report will also give you a chance to see if there are any errors that are pulling your score down. If so, have the errors investigated and fixed by the credit bureau.
If your score is a little low, consider taking some time to improve it before applying for a short-term flex loan. This can help increase the odds of getting approved at the lowest interest rate. Similarly, ensure that all other aspects of your finances are in order, such as your income and debt.
Step 3: Submit Your Application
Gather all required documents that your lender requests to demonstrate your income, such as:
- Proof of income
- Letter of employment
- Pay stubs
- Bank statements
You’ll also likely be required to provide personal documents, such as your driver’s license or passport so the lender can verify your identity. Submit all these documents along with your completed loan application.
Your lender should provide you with notice of approval within a day or two after submitting your application, and you’ll receive the funds shortly after.
Pros And Cons Of A Short-Term Flex Loan
A short-term flex loan offers plenty of perks, but it also has a few downsides that you should consider before applying.
Pros
Benefits of a flex loan are as follows:
- Loan customization. A short-term flex loan gives you the freedom to customize the loan according to your needs and finances. For instance, you can choose the repayment schedule that’s most convenient for you, and you don’t need to come up with collateral to back the loan.
- Less interest paid. Since the loan term is short, you’ll pay less interest over the life of the loan.
- Easy approval. Flex loans are easier to get approved for compared to traditional loan types. If you have bad credit, for instance, you can still secure a short-term flex loan, as long as other aspects of your finances meet the lender’s requirements.
- Flexibility with funds. There aren’t usually any restrictions on what the funds from a flex loan can be used for, as long as it’s legal.
Cons
Consider the potential drawbacks of flex loans, which include the following:
- Smaller loan amounts. Short-term loans are generally made for smaller amounts, usually between $2,000 and $20,000. If you need a larger loan amount, you may need to consider a longer-term personal loan.
- Less time to repay. You may find it difficult to come up with the funds needed to fully repay your loan over a shorter period of time.
- Risky. Most online lenders are legitimate and make it easy and convenient for borrowers — especially those with bad credit — to secure a loan. But there are some predatory lenders lurking that may not have your best interests in mind. Keep an eye out for these lenders to keep your money safe.
Flex Loans Vs. Payday Loans
Both short-term flex loans and payday loans come with very short time repayment periods. So, what makes them different from one another?
| Flex Loans | Payday Loans | |
| Loan Amounts | Higher than payday loans, up to $20,000+ | Up to $1,500 |
| Interest Rates | Lower rates than payday loans | Very high rates, as high as 365% APR |
| Loan Terms | As long as 1 year+ | Up to 62 days |
| Income Requirements | Meet the lender’s minimum income level | Meet the lender’s minimum income level; may be as low as $1,200/month |
| Credit Checks | Hard credit check usually required, depending on the lender | Not required |
What Can You Use A Flex Loan For?
Like other installment loans, flex loans can be used to cover the cost of whatever the borrower chooses. Depending on your financial situation, this can be anything from an unexpected cost to a vacation. Here are a few of the most popular reasons why consumers might apply for a flex loan.
- Medical emergencies
- Large purchases
- Unexpected expenses
- Car repairs
- Debt consolidation
- Vacation
- Home repair or updates
Bottom Line
Flex loans and other types of installment loans are great alternatives to payday loans. They offer more flexibility, typically have lower interest rates, and come with installment payments. Just remember, choosing the right flex loan provider is one of the most important steps you can take. So do some research and only apply with a lender you feel you can trust.
Flex Loan FAQs
How much can I borrow with a short-term flex loan?
Can I get a short-term flex loan with bad credit?
How are short-term flex loans secured?
Do short-term flex loans require a credit check?
®Fairstone Financial Inc. is a wholly owned subsidiary of Fairstone Bank of Canada.
*Interest rates are subject to change. Actual Annual Percentage Rate (APR) varies based on the province of residence and individual factors like credit details and loan amount. The interest rate on an unsecured personal loan is 31.99% in BC.
†On approved credit. Terms and conditions apply. Interest rates vary by province/territory and from customer to customer based on factors like credit score and borrowing history. See Fairstone’s website for details.
Fairstone Financial Inc. holds high-cost credit licenses in AB, MB (License #85047, expiring 20-02-2026) and QC; it has applied for a high-cost credit grantor license in NL. For license information by province, visit Fairstone.ca/HCCG
In Ontario, Fairstone Financial Inc. is licensed as mortgage brokerage 10821.
In Nova Scotia, Fairstone Financial Inc. is licensed as mortgage lender #2021-3000028.
