Banking

Citi Flex Loan Review: Does It Make Sense?

Editorial credit: Ideal-Photographer

If you are a current Citi credit card customer, you will likely have received an email regarding a new financing option called a flexible loan that can be integrated with your credit card account.

While this isn’t an option you’ll use on a regular basis, there are occasions when a Flex Loan from Citi might be a better way to shop or more effectively manage your credit card balances so you pay them off more. quickly.

Citi Flex loan: what is it?

A Citi Flex loan is not a Personal loan. You can already find personal loans at Citi.

Instead, this product is a hybrid between a personal loan and a regular credit card limit. Concretely, the product works similar to a personal loan, but the process is much faster.

Instead of having to make a formal application like a personal loan, a Citi Flex Loan works under your existing credit card agreements. You can take out a loan for the full amount of your overall credit limit. Of course, you can also take out smaller loans.

It is not at all necessary to ask for this product. The offer is presented to existing customers on their online statements. The Flex Loan provision can then be used or ignored as you see fit.

While a flexible loan won’t help increase your credit card limit, it won’t decrease it either.

If you decide not to take out the Flex Loan, you will still have the full credit limit on your card.

citi flex loan complaints
Editorial credit: Rafapress

How it works?

A Flex Loan gives you full control over the borrowing process.

As mentioned, part of your existing credit limit will be usable for a flex loan. You can tailor the loan to your needs.

Taking out a small loan of $ 500 would cost $ 44 per month over 12 months to just $ 11 per month over a 60 month period.

With a larger loan of $ 5,000, you would pay $ 440 per month for 12 months up to $ 106 if you took out the 5 year financing. This is based on an APR of 9.99%.

Citi provides you with that interest rate, and then you select the amount you want to borrow up to the maximum amount. You also choose the term that works best for you.

When you have an outstanding balance in place, the new loan will represent an additional payment.

The flexibility of this financing is one of its main selling points.

For lump sum loans

You can access a portion of your line of credit with a limited term, monthly payment, and a fixed interest rate.

There is no application fee for the service.

Funds can be transferred to your bank account within 1 or 2 business days. Alternatively, you can opt for a check instead.

For purchases

Sometimes it is possible to use a Flex Loan for qualifying purchases.

If you were purchasing computer hardware, for example, you could potentially use a flex loan to purchase the hardware at the checkout.

You can then decide how quickly you want to refund the purchase.

Who is eligible for this funding option?

You need an existing Citi credit card to be eligible for a Flex loan.

However, this product is only available to certain customers. You may have had a Citi account for years, but you may not find yourself eligible for a Flex loan.

Even if you get this funding, it may not be permanent. Offer may be made available “from time to time”.

When Citi Flex Loan pays off

The main advantages of the Citi Flex Loan are:

  • An interest rate potentially lower than the APR of your credit card
  • Keep a portion of your outstanding balance as a fixed rate term loan

There are two other minor advantages.

You get a fixed payment structure instead of the revolving financing offered by credit cards. This means that you can keep a balance permanently with credit cards, but not with a flex loan where you can limit the terms to as short as 12 months. This will force yourself to pay off your balance instead of letting it continue for years.

With no set-up fees and no credit check, the Flex loan could save you money. A $ 10,000 personal loan attracting a 6% origination fee would cost you $ 600. Plus, these fees are taken from your loan amount, which gives you only $ 9,400, which may not be enough for your needs.

When the Citi Flex loan is not advantageous

The minimum loan amount is $ 500 while the maximum amount is your credit limit.

You cannot use the Flex Loan to pay off an outstanding balance. This should be paid according to the original conditions.

While the rate may be lower than your Citi credit card, it could still be higher than what you would pay for a personal loan.

The Flex Loan is not an additional credit, but simply allows you to better categorize an outstanding balance as a term loan.

Finally, the Flex Loan should be viewed more as a promotional offer and should not be relied upon as the offer can be withdrawn at any time.

Final thoughts

Citi Flex loans allow you to tap into your credit limit and exercise more control.

Whether you need to make a large purchase or just need short-term cash, you can access the Flex Loan portion of your credit limit and pay it off in as little as a year.

Normally, the interest rate on the flex loan should be lower than the rate on your credit card. This allows it to work in certain specific situations.

The fact that this product eliminates the revolving nature of credit cards is also what makes it a decidedly inflexible option.

Review of Citi Flex Loans

Review of Citi Flex Loans

Citi Flex Loans allow you to leverage your credit limit and exercise more control. Whether you need to make a large purchase or just need short-term cash, you can access the Flex Loan portion of your credit limit and pay it off in as little as a year. Normally, the interest rate on the flex loan should be lower than the rate on your credit card. This allows it to work in certain specific situations. The fact that this product eliminates the revolving nature of credit cards is also what makes it a decidedly inflexible option.

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