Many lenders will provide you with short term personal loans. Well, these loans are offered for a shorter tenure that is why they are called short term loans. Usually, a personal loan is of 60 months tenure. But these loans offer a repayment period of 18 or 24 months depending on the lender. In a short term personal loan, the maximum limit is INR 5 Lakh. For a higher amount, borrow a standard personal loan. Continue reading this article to find out more about the short term loan.
What are the Benefits of a Short Term Personal Loan?
The following is the list of benefits you’ll get when you borrow a short term loan.
Same as a regular personal loan, a short term personal loan also doesn’t require any assets. The lender will offer you a lump sum amount based on your income and other factors. So, check the loan eligibility and borrow a short term personal loan if you need a lump sum amount.
Reasonable Interest Rate
Well, short term loans tend to come at a reasonable interest rate. And why is that? Because there is not much risk attached to the loan due to the small amount of loans. So the rate of interest won’t be much. The starting rate of interest for a short term loan is 13.00% onwards. But it may vary from lender to lender.
Reasonable Loan Amount
The benefit of a short term loan is that you can borrow as low as INR 5,000 – 10,000. This facility is not available to you in a basic personal loan. So, if you need only a few thousand to meet your financial needs, apply for a short term personal loan. When you do so, you can easily afford a lump sum amount in equated monthly installments. And in this type of personal loan, you don’t even have to worry about the lengthy nature of repayment as it is only a few months, a maximum of twelve.
How to Apply for a Short Term Personal Loan?
These types of personal loans are available online. So, you need to visit the lender’s website or download an application. Once you do the same, follow these steps –
- Fill in an application form with your name, mobile number and email address
- Now, upload documents such as PAN or Aadhaar Card
- Loan offers will appear on your screen
- Select any one loan offer
- Click on the ‘Proceed’ button
- Upload your bank statement or salary slip
Once the documents are verified, the lender will transfer the loan amount to your account.
What is the Short Term Personal Loan Eligibility?
Well, the eligibility criteria may not differ much from the regular personal loan. Check out the same below –
- Age Limit – A minimum of 21 years of age is required to borrow short term loans. It is because at that age one can earn a decent income. There is less risk associated with the applicant.
- Type of Employment – Both salaried and self-employed can borrow a short term loan as long as they have a regular source of income. To prove the same, you need to submit the bank statement and other necessary documents. And once the income is found to be true, the money is disbursed to your account.
- Monthly Income – With a minimum income of INR 12,000, one can apply for a short term personal loan. This criterion may differ in a regular personal loan. So, this is a plus point of applying for a short term loan.
CIBIL Score – A minimum CIBIL Score of 600 is required for a short term loan. from moneyview, Moneytap. Yes, it is less compared to a basic loan. So, if you don’t have an ideal score of 750, borrow a short term personal loan to meet your financial needs.