A short term personal loan is a type of unsecured loan that can help you fulfill cash requirements during a time of need. Be it planning for a wedding or a medical emergency, a personal loan can help you cater to both. It is also ideal for those who have no or minimal credit history. Such people find it difficult to get a loan from a traditional lender because they will not lend money to those with a low credit. Short term loans are booming in the credit market and are expected to gain further popularity in the coming times.
Here are some of the top benefits of short term personal loan
1. Minimum documentation
The short term personal loan has a quick disbursal turnaround and there is minimal documentation required. This reduces makes it quicker for you to have access to funds.
2. Easily accessible
A personal loan can cater to individuals who are new borrowers or those individuals who have a low credit score.
3. No long–term commitment
The loan is provided for a shorter period of time and the risk of default associated with the borrower is less.
4. No collateral
A personal loan will not require any collateral and is basically given on the basis of the profile of the customer.
5. Quick disbursal
After the application, you can get access to the loan amount in 24 hours.
6. Lower EMI
You can make affordable EMI payments on the loan. You do not have to worry about a huge cash outflow from your income.
What Are the Types of Short-Term Personal Loans?
Besides a line of credit from a bank, you also have the option to obtain money in the form of a one-time, short term loans to finance your temporary working capital needs. You can apply for a Bajaj Finserv Personal Loan at Finserv MARKETS to fulfill all your financial requirements. Moreover, such loans come in various forms and the following are the types of short term personal loan:
Merchant cash advance
In this type of loan the lender loans the amount needed by the borrower and the borrower makes the loan repayments by allowing the lender to access their credit facility.
Lines of credit
In a line of credit, the credit limit is set and the business is able to tap into the line of credit as needed. Therefore, monthly payments due will vary based on how much of the line of credit has been accessed.
Pay day loans
Pay day loans are emergency short term loans. The repayments for these loans are typically done by the lender taking out the amount from the borrower’s bank account, using the continuous payment authority.
Online or installment loans
It is relatively easy to get a short term loan online, where you just have to fill in your personal loan application online and within minutes from getting the loan approved, the money is credited to the borrower’s bank account.
In Invoice financing the lender loans the money and charges interest based on the number of weeks that invoices remain outstanding. When an invoice gets paid, the lender interrupts the payment of the invoice and claim the interest charged on the loan.
Difference between short term loans and traditional loans
A short term personal loan can be availed for a duration ranging from three months to two years whereas traditional personal loans can be taken for an extended period of time. Short term loans are available for a smaller amount which can be as high as INR 2 lakhs and traditional personal loans can go as high as INR 50 lakhs.
How can you use short term loans?
A short term loan is available for immediate requirements and you can use it to meet the cash flow needs for a medical emergency, fulfilling an invoice etc. You will not have to apply to different banks and wait for the treatment to start, instead, you can avail of a small personal loan and ensure that the treatment starts immediately. There is minimal paperwork and the funds will be transferred to your bank account in no time. You can also download Bajaj Finance App for easy access.
You can also use the Bajaj Finserv loan for traveling. It will help pay for your expenses and you will be able to fulfill the desire of having that much needed personal time with your loved ones. The loan can be used for the purpose of home renovation as well. If you fall short of cash while renovating the home, a loan will help cover the expenses.
Short Term Personal Loan Application process
If you have been wondering how to get a short term personal loan online, follow the procedure mentioned below.
- You need to enter your 12-digit Aadhaar number.
- Provide the loan amount and the tenure you want for the loan.
- At this stage, you need to upload the required documents and get quick approval on the loan.
- Once the verification of the documents is complete, the money will be transferred into your account.
Eligibility Criteria for Short Term Loans
- Applicant must be an Indian citizen.
- Applicant must be either a salaried or a self-employee or a business owner.
- Applicant must be at least 21 years of age.
- Applicant’s salary or income should be at least Rs. 15,000 on a monthly basis.
One can even calculate his/her eligibility using personal loan eligibility calculator.
Documents required while availing for a Short Term Personal Loan
- Identity Proof: Aadhaar Card, Driving License, Voter ID, Passport, etc.
- Address Proof: Aadhaar Card, Passport, Driving License, Phone or Electricity Bill, etc.
- PAN Card
- Last 3 months Bank Statement
- Last 3 months Salary Slip
- 1 Passport Size Photograph
FAQs on Short Term Personal Loan
1. Do I need to offer any collateral or security while availing short term loans?
Ans: No, Short Term Loans are unsecured loans, there is no need to offer any collateral or security while availing a short term personal loan.
2. What is the tenure of a short term personal loan?
Ans: Tenure of short term loans vary between 3 months to 1 year.
3. Are interest rate high or low for Short Term Loans?
Ans: Short term personal loan interest rate are low.
4. How fast is loan amount disbursal?
Ans: Short term personal loan is disbursed within 2-4 working days after the loan approval.
A short term personal loan in India is considered to be an ideal option for those looking to get access to cash quickly. You do not have to go through the tedious application procedure and can have funds transferred in your account in no time. Leading Non-Banking Financial Institutions of NBFCs like Finserv MARKETS offer personal loans with an approval time of as low as 3 minutes and a disbursal time of 24 hours! So why wait? Check your eligibility and avail a Personal Loan with Finserv MARKETS, today!
Also read about how to get personal loan for low CIBIL score.
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