How Partial Payments Work on a Flex Loan and How They Cut Interest Costs
If you’ve taken out a flex loan, you probably already know how helpful it can be when you need fast cash. But did you know that making partial payments along the way can actually help you save money?
In this article, we’ll explain how partial payments on a flex loan work, how they can reduce interest costs, and why they’re a smart move for Tennessee borrowers.
First, What Is a Flex Loan?
A flex loan is a type of open line of credit. That means you can borrow money up to a certain limit, and then repay it over time. Unlike a payday loan, you don’t have to pay it all back at once. And once you pay off part of your balance, you can borrow again—just like with a credit card.
Flex loans are designed to be flexible (hence the name). You choose how much you borrow and how much you pay each month, as long as you meet the minimum payment.
What Are Partial Payments?
A partial payment means you pay more than the minimum, but less than the full amount you owe. For example, if your monthly minimum payment is $50, and you decide to pay $100 instead, that’s a partial payment.
You’re not paying the whole loan off at once—but you’re doing better than the minimum. And that makes a big difference.
How Partial Payments Help You Save
Every time you make a payment on your flex loan, part of it goes toward the interest (the cost of borrowing) and part goes toward the principal (the money you borrowed).
When you make only the minimum payment, most of it goes to interest—and only a small amount goes to your actual loan balance.
But when you make partial payments that are higher than the minimum, more of your money goes toward the principal. This helps in two ways:
- You lower your balance faster.
- You pay less interest over time.
That’s because flex loan interest is usually based on your daily balance. The quicker you bring down your balance, the less interest you’ll be charged each day. Even small extra payments can make a big difference in how much you pay overall.
Let’s Look at an Example
Say you borrow $500 on a flex loan. Your minimum payment is $60/month.
- If you pay just the minimum, it could take you over a year to pay it off, and you’ll pay hundreds in interest.
- But if you make partial payments of $100 each month instead, you could pay it off in about 6 months—and save a lot on interest.
Every little bit helps!
Tips for Making Partial Payments
- Try to round up your payments whenever possible.
- Make extra payments whenever you get extra cash (like a tax refund or work bonus).
- If you get paid every two weeks, consider making bi-weekly payments to stay ahead.
Even an extra $10–$20 a month can reduce how much you owe in the long run.
Need a Flex Loan in Tennessee? Turn to Advance Financial
If you’re looking for a fast, flexible loan in Tennessee, Advance Financial offers 24/7 flex loans with no early payoff penalties. That means you can make partial payments anytime, and pay your loan down faster—without any extra fees.
- Get approved online or in-store
- Access funds instantly
- Make payments your way—when it works for you
Need cash fast? Visit Advance Financial and apply today. A better way to borrow is just a few clicks away.
