When you’re looking for an unsecured loan, the term ‘flexible loan’ is one you will hear frequently. But be aware, because a flexible loan can mean that the APR you are offered is liable to change.
Generally, if you are offered a flexible loan, it means it works a little like a credit card, and you can borrow as and when you need it (up to your limit), and choose what you repay each month, above a minimum amount. It is usually an ongoing agreement, but because of this flexibility, the APR is often higher than fixed term, fixed rate loans. As with credit cards, the APR can change at short notice.
At Zopa, we describe our loans as flexible – but the APR is fixed for the term of the loan, and you can’t increase your borrowing without applying for a new loan. The flexibility refers purely to the fact that you can pay off your loan early, make overpayments and lump sum payments at no penalty.