Financial needs may arise anytime unpredictable. For many financial crunches, short-term loans can be considered as a solution for immediate cash issues. Here’s everything you need to know about these loans, including their perks.
What are short-term loans?
As per term short-term loan suggests, it’s a kind of loan provided to an individual for a short span that generally ranges from one month to a year. Short-term loans are usually unsecured, which means that the borrower does not have to provide any security or collateral for the loan amount. Short-term loans are also known as short-term installments or short-term finance. These loans are beneficial for individuals who cannot get loans for a longer tenure from a bank or a lender due to various reasons.
Here are some reasons to apply for a Short-Term Loan:
Flexible in nature
Short-term loans are multi-utility loans. You can also borrow money for not-so-urgent personal expenses. It may be from buying a gadget to paying your medical bills, from planning a vacation to financing your education.
Improves Credit Score
As the amount borrowed is for a shorter period, it’s much easier to repay the money borrowed. Repaying your loan timely will impact positively your credit score. Having a good repayment record can help you to restore good credit.
No security required
Short-Term Loans are generally unsecured. There is no need to provide any collateral or asset in trade for the loan amount. This becomes profitable for the customers who cannot offer any collateral as security. This is one of the common reasons why they are obtained easily notwithstanding your personal and business’s financial situations.
The paperwork and documentation required for a short-term loan are very minimal. Making the entire process swift and smooth for the customer as the documentation can be performed effortlessly.
Depending on the lender, your application form gets approved within a few hours after filling it. In the modern age of digitalization, borrowing money can be done online as well. Just fulfill the requirements and you can have the money within the same or the next day.
These loans generally have more quick disbursals than most of the other long-term loans. As the loan amount is small, also documentation is minimum, so the disbursal takes less time.
Short-term loans can be a simple aid to address your immediate money needs. They begin at just Rs.2,000 and can extend up to Rs.3,00,000. The customer can choose the loan amount based on their needs.
Unlike various loans, short-term loans come with a shorter repayment tenure. Instead of repaying these loans for years, these can be paid back in six to 18 months.
Short-term loans are to resolve the cash requirements of the borrowers. One should opt for short-term loans for boosting cash flows in the short run. Before taking any short-term loan, always remember to check out the fees and the interest rate, and always be positive to pay the loan back on time.