With so many loan options and lenders available, getting the loan that you desire is easier. Whether you want funds for your business or for your own needs, a loan can be the best option. There are several types of loans in India, and one that’s taking over the market is short-term loans; for a good reason, of course. These loans are very different from any other type of loan.
For instance, companies may require capital to continue operating. Orders are made, but there are no funds to buy the materials and continue the production process. Similarly, you may want to expand your small business. In addition, personnel will want to be paid, but the payments are delayed. All these are some of the financial problems people go through. But a short-term loan is what to look for when stranded.
Short-term loans come with a lower amount that should be repaid in a short time. With a limit of 2 lakh, you are sure to solve any money-related issue that comes your way. These loans are ideal for smaller businesses, self-employed, and salaried individuals who want smaller funds for their business or personal needs. Besides, when you have an unplanned emergency, a short-term personal loan is a financial product to go for.
A short-term loan is a type of unsecured loan that comes with a short repayment period. Generally, it ranges between 3 to 15 months. A short-term loan offers great benefits to borrowers who can’t get a long-term loan from other financial institutions or banks. As you know, before you get a long-term loan, there are many things the lender assesses since these loans are very risky, making them not a good option for those who want a quick cash loan.
Short-term loans are unsecured, meaning that borrowers don’t have to pledge security as collateral to get the loan. These are short-term installments or short-term finance. Many factors differentiate short-term loans from other types of loans you can find on the market. One of the major factors is easier accessibility, which is why they are in high demand in India.
Why Short Terms Loans are in Demand in India
Here are some of the reasons why short terms loans are highly sought after by most individuals who want financial help;
The reason why short-term loans are in high demand is that there’s minimal documentation required. This makes the process simpler, and within minutes you will be done with the application process.
Quick Application Process
Another great aspect of short-term loans is that you don’t have to deal with a longer application process. The process is very fast since you are only required to offer a few documents, like your passport, to prove your identity. You will also need proof of your income to show you can repay the loan, such as your recent salary slips or taxes of the previous year if you’re self-employed. This will enable you to get a personal loan for self-employed individuals.
No Collateral Required
Short-term loans are unsecured, meaning you don’t have to provide any security as collateral. You are not required to own a home or have a large account before you get the loan. Besides, your credit score won’t be considered either. This makes these loans a good option for young people who are looking for ways to start their lives or those who don’t have sufficient funds to make ends meet and have no savings.
Quick Access to Funds
Unlike long-term loans, which involve a lengthy application process and take more time to get the funds, short-term loans are approved within a few hours, and you get your money in your account immediately. Therefore, if you have an emergency and want funds the fastest way possible, these loans are a great choice to resolve the issue quickly. For instance, you may want to repair your leaky roof or have an appointment with the doctor to remove your tooth. With a short-term loan, you get the money quickly, solve the problem, and repay it later.
Flexible Repayment Period
Short-term loans are very flexible and convenient in terms of repayment tenure. If you need extra cash, just apply for a short-term loan because most lenders offer an online application. A shorter tenure will not accrue the interest and reduce the stress of owning a debt. With a longer repayment period, you will be tortured emotionally and psychologically as you continue paying the loan for more years.
Eligibility for Short-Term Loans in India
Eligibility for short-term loans can vary between lenders. However, most of them have basic eligibility criteria to approve. Below is what you must have to be eligible for a short-term loan:
- You should be an Indian citizen.
- You should be a salaried or self-employed person
- Be 21 years and above.
- You should have a salary of Rs. 20,000.
There is a high demand for short-term loans in India. Many financial institutions can now allow individuals to apply for a loan without strict rules of having collateral or with a higher credit score. With faster approval, many borrowers decide to for these loans in case of emergencies. Furthermore, a short-term loan is a great option if you want small capital for your business or to cater to some of your personal needs.