Guide to Citi Flex Loans

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Credit cards offer a convenient way to pay for everyday purchases, yet there are always situations where you may prefer cash. Now, Citi cardholders have the option of accessing both more readily through Citi Flex Loans.

The Citi Flex Loan program can be a useful alternative to running up a balance on your card for unexpected expenses or taking out a credit card cash advance. Cash advances typically require an upfront fee (normally 5 percent of the advance amount), and the money you borrow will begin accruing interest at a higher variable rate from day one with no grace period.

Here’s how Citi Flex Loans work, and some tips to help you decide whether the program is a good option for you.

What is a Citi Flex Loan?

Citi Flex Loans are types of Citi Flex Plans, along with Citi Flex Pay.

With Citi Flex Loan, you can take out a loan on your eligible Citi card’s credit line at a fixed interest rate. You may decide how much you need to borrow and settle on a fixed monthly payment and fixed interest rate that lasts for the life of the loan without completing a separate application or credit check.

Citi Flex Pay, on the other hand, is a flexible payment plan for Citi cardmembers that allows eligible credit card purchases to be paid off over time with a fixed APR.

Both Citi Flex Loans and Citi Flex Pay are options available when you create a Citi Flex Plan, Citi’s program offering cardholders more flexible payment options and fixed terms.

How does Citi Flex Loan work?

A Citi Flex Loan lets eligible Citi cardmembers convert part of their credit card account’s credit limit into a personal loan. You can pay your loan off in fixed monthly installments, with both a fixed interest rate and schedule (up to 60 months) so you know exactly when you’ll be debt-free. You can customize these terms during the loan process.

Citi doesn’t charge any separate fees to get started besides your interest rate, although avoidable fees like late fees associated with your account may still apply. The minimum amount you can borrow with a Citi Flex Loan is $500, and the maximum depends on your income, your credit limit and additional factors that apply when you request the loan.

Once you’ve completed the process, you can receive your funds via direct deposit in as little as 1-2 business days or request a paper check, which may take up to 10 business days to receive.

As you pay off your Citi Flex Loan, you won’t have to make an extra payment each month; the amount due on your account will include both your credit card’s minimum payment due as well as the fixed monthly payment for your Citi Flex Loan. You can choose to pay more than the minimum at any time, however, and there is no prepayment penalty applied if you pay your balances off early. You also will not earn credit card rewards on your loan.

Effects on credit

Taking out a Citi Flex Loan does have the potential to impact your credit score in a negative way. The loan increases your percentage of credit utilization and amounts owed, which makes up 30 percent of your FICO Score, according to myFICO. Experts suggest keeping your overall amounts owed below 30 percent of your available credit.

While increasing your credit utilization can harm your score, the most important factor that makes up your FICO Score is payment history, accounting for 35 percent. This means that you can work on improving your credit score by making timely payments in full each month. As your credit utilization drops, your credit score may also improve.

How to find out if you’re eligible

According to the Citi website, cardholders can check to see if they’re eligible for a Citi Flex Loan by logging into a Citi online account. Citi Flex Loan offers may be presented on your Account Overview page, or you may be able to view available offers by selecting the “Services/Credit Card Services” option at the top of the page.

You can also call Citi customer service to ask if you’re eligible for a Citi Flex Loan.

Advantages of Citi Flex Loan

  • You don’t have to apply for more credit, thus there will be no hard inquiry on your credit report.
  • These loans don’t come with any fees, including the pricey origination fees some personal loans charge.
  • You may qualify for a reasonable APR that helps you save money over time.
  • You’re already in the Citi system and approved for a line of credit, so you won’t have to go through a lengthy process or fill out a full loan application to get started.

Disadvantages of Citi Flex Loan

  • You don’t earn credit card rewards, including cash back or rewards points, on Citi Flex Loans.
  • Citi Flex Loans may come with a higher interest rate than you could get with a personal loan.
  • These loans can cause negative impacts to your credit score if your utilization goes up too far.
  • You must be targeted for a Citi Flex Loan to apply, meaning they’re not available to everyone.

Citi Flex Loan alternatives to consider

If you’re on the fence about a Citi Flex Loan, make sure to consider some of the alternatives.

Personal loans, for example, currently average about 11 percent interest, and you can also secure a fixed monthly payment and a payoff date that will never change. Personal loans are easy to apply for online, and you can get your money deposited into your bank account within a similarly short time.

Home equity loans and home equity lines of credit (HELOCs) can also work well if you have considerable home equity you can borrow against. Both offer competitive interest rates since you’re using the value of your home as collateral, and may let you borrow up to 85 percent of your total property value. However, home equity loans come with a fixed interest rate and fixed monthly payment similar to personal loans, whereas HELOCs offer a line of credit with a variable interest rate.

Before you move forward with a Citi Flex Loan, consider whether it aligns with your needs and ability to repay. Borrowing money doesn’t have to be stressful, but you should do some research to make sure you’re getting the best deal and find the best payoff plan for you.

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson began her career working in the funeral industry, which may make you wonder why she works in personal finance now. Yet, the funeral industry taught the author everything she needs to know about the value of one's money and time. Johnson left the mortuary business a decade ago in order to explore her passion for personal finance and travel the world, and since then, she and her husband have built a debt-free lifestyle that has them on the path to retire very wealthy in their 40s. Holly's love of budgeting also led to the creation of her debt payoff book, “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."
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