Everything You Need to Know About Short Term Personal Loan

Financial crises are a fact of life. They can strike anyone, anytime. When they strike, you need a personal loan to tide over them. A personal loan is a famous line of credit, and you must have heard of it. But have you ever heard of short term personal loan? It’s worth knowing. 

What is short term personal loan?

For short term personal loan, the name gives it away. These are primarily personal loans with a shorter tenure, typically a year or less, meant for short term financial needs. They represent easy loaning with no collateral requirements, broad eligibility criteria, and superfast approvals and disbursals. The quantum of loan, interest rates and other factors may vary.

Has this piqued your curiosity? If yes, let’s elaborate the features of short term personal loan. 

• Interest rates:

Short term personal loan rates are usually competitive. You need not bear the expensive cost of borrowing to fund your urgent requirements. You might be paying anything between 12.99 % and 36% as interest rates, depending on your lender, credit history and other factors. Instead, if your CIBIL Score is 750, expect interest rates equivalent to that of a typical personal loan.      

• Fast cash:

 A short-term personal loan is designed to satiate urgent fund requirements even at the 12th hour. The application process is simple, while processing and disbursals are quick. It takes a day or two to navigate through the entire process and have money in your account. 

• Collateral-free:

Short term personal loans are mostly unsecured, eliminating the need to pledge any asset. That’s in sharp contrast to other loans where you need to tie up your hard-earned assets for funding. 

• Minimal credit checks:

Loans are often denied to seekers with a less-than-stellar credit history. But that’s not the case with short term personal loans. As long as you have a stable income, these loans come quickly. 

• No long-term commitment:

A short term loan has shorter tenor. You can raise funds quickly to tide over a financial crunch, repay them within a year and move on. No long term commitments are involved. 

• Unlimited quantum of loan:

The loan amount raised through a short term personal loan is virtually limitless, provided you have a stellar credit history, high repayment capacity and enough income. 

• Eligibility:

Lenders, especially NBFCs, keep eligibility requirements secure to allow emergency funding for virtually everyone. Though requirements differ from lender to lender, you typically need to be:  

1. An Indian citizen
2. Aged between 21 and 60
3. Salaried for a minimum of six months
4. Self-employed with at least a year of professional experience
5. Earning INR 20,000 monthly in non-metro cities and INR 25,000 in metro cities

• Documentation:

Short term personal loans are a natural line of credit with minimal documentation. You’ll need: 

1. A duly filled application
2. Two recent passport size photographs
3. Identity proof: Any one of Driving License, PAN card, Voter ID card, Passport
4. Address proof: Any one of Ration card, Utility Bill, Passport, DL, Rental Agreement
5. Age Proof: Passport, PAN card, Certificate from a Statutory Authority
6. Previous six months bank statement
7. Last three months salary slip
8. Income Tax Returns and Form 16

How to apply?

With lenders accepting loan applications online, loaning cannot be any easier. Just visit your lender’s website, fill in the required fields, and upload the necessary documents. The lender will then evaluate your eligibility for the short term personal loans online at the earnest. If eligible, your application will be processed, and you’ll be informed via customer service regarding the same. Feel free to negotiate with the lender on interest rates, tenor and terms of the loan for the best end of the deal. Upon approval, the disbursals are ensured quickly into your account.