What is a Short Term Loan?
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.
Why Do You Need a Short Term Loan?
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 –
- Personal needs.
- Business needs.
Short Term Loan for Business:
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 –
- Meeting monthly operational cost
- Business expansion
- Immediate capital requirement to run a business etc.
Features of Short Term Loans in India
- Short loan repayment tenure.
- No collateral required.
- Apply online and get it approved in no time.
- Can be availed by both salaried and self-employed individuals.
Short Term Loan FAQs
It depends on your requirement plus your creditworthiness. Bank or your lender will decide the amount based on your eligibility which you can actually online or contact customer care.
A short-term loan is usually offered for a period of 6 months to 1 year. However, depending on the type of short-term loan you take and your lender, you may be asked to repay it within a month or two. For example, if you opt for Trade Credit, you need to repay the amount within a period of 30 to 60 days maximum.
No. You do not have to provide any security or collateral to apply for a personal loan in India. However, if you are applying for a bridge loan which is also a type of short-term loan, then you need collateral to support the loan.
Ideally, you should be as it is an unsecured debt. However, it depends on your lender. Besides, there are lenders like Money View who have their alternate credit model to help you in this regard. With a minimum credit score of 650, you should be able to apply for a personal loan from Money View.
- If you fail to repay your loan amount within the scheduled repayment date, you would be charged a penalty fee
- Yes, you can request your lender to extend the loan repayment tenure and your lender will decide whether it can do so or not.
Yes. It’s up to you how you want to utilize the amount.
You should be at least 18 years old to be eligible for the same.
Your lender will mostly look into your relationship with it and your past credit history. If you have a good relationship with your lender, it becomes easy for you to get a competitive interest rate on your loan.
An overdraft loan, which is a type of short term loan, is usually sanctioned to you against your salary account, term deposit, or savings account opened with a particular bank. If you meet the above-mentioned criteria, you are eligible for an overdraft loan.
It stands for Equated monthly installments (EMI) that you need to pay back to your lender every month to repay your loan amount.