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Inflexible Expense

Reviewed by Apoorva | Updated on Sep 30, 2020

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Introduction

An inflexible expense is an expense that cannot be skipped or adjusted by a company or an individual. It is an inevitable recurring payment or debt.

What is Inflexible Expense?

For an individual, an inflexible expense, such as house mortgage payments, car mortgage payments, alimony, or child support, have fixed repayment schedules in terms of amount and date. For companies, interest payable on loans and employee wages would be inflexible expenses.

What Role Does Inflexible Expense Play?

Inflexible expenses are one of the criteria considered by lenders for granting mortgages, personal loans, or car loans. Personal loans are unsecured (i.e. no collateral), unlike a mortgage or car loan. So, eligibility criteria are stricter.

Apart from inflexible expenses, lenders typically look at a few criteria to evaluate personal loan applications, such as credit score, employment history, and current income.

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