As the name implies, a short-term loan is basically provided for a short tenure which could be less than a year also. It’s a kind of unsecured loan that does not require you to submit any collateral or security.
Short-term loans are quite useful when it comes to meet your urgent financial needs, or you need quick cash to meet your short-term needs. The amount received as short term loan can be used to meet your both –
It’s an affordable option for the small businesses who need quick cash for the short term to run their business, but not eligible to apply for a long-term loan from the bank. Short-term loans are the most sought-after option for small or big businesses to meet their immediate money crunch. Listed below are some of the business expenses that can be fulfilled with the help of a short term loan –
There are different types of short-term loans available in India that help you get quick cash to meet your short-term financial requirements. Listed below are some of the most popular short term finance options that you may find useful:
It's a type of short-term financing option that enables a trader to purchase goods or services from another trader on credit and pay later at a scheduled date. It is a type of short-term loan where borrowing and lending take place between two traders; where one trader lends money to the other to purchase stuff on credit. It is a form of credit with no interest – the borrower need not pay any interest amount on the credit brought. Trade credit, which is generally given for a period of 30 to 60 days, helps a business to finance short-term growth
It's a type of short-term loan where the borrower receives the loan amount for a particular period and needs to pay back the entire amount with interest as soon as his/her salary is credited to the bank account. In payday loans, the lender collects the entire amount from the borrower’s bank account. The interest charged on payday loans is comparatively high. It’s an unsecured loan and a credit check required to avail a payday loan. And you get your desired cash in your chosen bank account within a few minutes.
It’s another short-term financing option used by people to meet one's personal as well business needs until he/she receives a long-term financing option. It helps a borrower to meet the short-term liquidity requirements and also known as gap financing as it helps in bridging the gap between short-term and long-term cash requirements. Such loans help you grab unexpected opportunities, and mostly used to meet the contingencies related to property buying and selling. Bridge loans are usually approved for a tenure of 6 months to 1 year, and require security/collateral to back the loan amount.
Another short-term loan that can help you meet any urgent financial needs is a demand loan. Banks or other financial originations may provide demand loans to customers after analyzing the history of creditworthiness of a customer and how good is his/her relation with the bank. It comes with the following flexibilities – here the borrower need not follow the regular principal and interest repayment schedule; there is flexible loan repayment tenure, and no security required to avail the loan amount. However, he/she needs to prepare to return the borrowed amount at any time on demand by the lender.
It’s a type of short-term loan that can be taken against one’s salary account or term deposit or savings account opened with a bank. Overdraft loans or overdraft facilities helps you meet your short-term financial requirements. Any banking intuition determines the overdraft limit based on a customer's existing relationship with the bank that includes a customer’s loan repayment history, account balance, etc. The interest rate on the overdraft amount is calculated based on the amount of overdraft used.
Another means of availing short-term cash is to apply for a personal loan which you can repay within a year. The amount received as a personal loan can be used for multiple purposes and, also to fund your business requirements. Nowadays, it’s quite easy to apply for a personal loan and receive the money in your bank account in 24 hours. It’s an unsecured loan and comes with flexible loan repayment tenures.
It’s pretty simple. You can apply for a short term loan in India by following any of the below mentioned tools -
You can visit the lender’s website, register yourself, and then log in to apply. Click on click on the loan section, select short-term loans, and click on “apply”. You would be required to fill in your personal details and other relevant fields to complete the application process.
If you are a smartphone user, you can apply for it more easily. Download the lender’s application (as most lenders nowadays have their short-term loan app or mobile apps) from Google Play Store and fill in the required details and complete your application process on your phone and receive the loan amount in your bank account.
Additionally, you can contact the customer care of the chosen lender and request you to guide you throughout the process of applying for a short-term loan. They will provide your necessary guidance to apply for the same.
Listed below are some of the common steps you need to follow to apply for a personal loan in India via online or offline -
And finally submit the application form with all required documents.
Different lenders charge different interest rates on short term loans. Hence, the interest and processing fees charged on it vary from lender to lender. While deciding the interest rate on your short term loan, you lender may consider the following factors:
The lowest interest rate on short-term loans starts with as low as 8.5% onwards. For example, We at Moneyview – the private lending company charges a monthly interest rate of 1.33% per month on personal loans which is also a type of short-term loan. Besides, all lenders in India charge late payment fees and penalty charges if you can repay the loan on time or miss your monthly EMIs.
The following documents are generally required to apply for a short term loan in India –
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Disclaimer
The starting interest rate depends on factors such as credit history, financial obligations, specific lender's criteria and Terms and conditions. Moneyview is a digital lending platform; all loans are evaluated and disbursed by our lending partners, who are registered as Non-Banking Financial Companies or Banks with the Reserve Bank of India.
This article is for informational purposes only and does not constitute financial or legal advice. Always consult with your financial advisor for specific guidance.
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