At one point in time, everyone would experience an acute shortage of money in their life and might understand the need for a temporary boost that can come to their rescue. Short-Term Loans exactly fall into these kinds of situations.
Here, lenders could be a bank or a financial institution. Likewise, borrowers can also be an individual or business organization.
The short-term loans are designed specifically to meet particular needs and repayment is made in instalments. The repayment duration may last for a maximum of 2 years. Being a country that houses largely middle-income families, Short-Term Loans in India are very much popular, and indeed is a default choice in the event of crisis or needs!
Acquiring Short-Term Loans in India is convenient as the repayment structure is mostly flexible. At a quick glance, if you overview features of the type of short loans, you would find the following common traits.
Loan tenure extended up to one to two years.
Can be applied as a business or as an individual.
Based on the lender’s policies. Collateral or guarantor is not obligatory.
Most of the lenders have made online platform availability such as an app or a website wherein an applicant can apply with a single tap on mobile followed by few documentation checks. Money View Personal Loan is one good example where you get disbursal with minimum documentation.
Among the available types of Short-Term Loans, Personal Loan is a very familiar loan.
Now, that you know what a Short-Term Loan is and what is its significance, it is time to acquaint knowledge about what are the types of Short-Term Loans in India one can avail, and here we list you the top and the best five below.
These are Short-Term Loans that serve you to take a leap in your journey where cash crunch is hindering you. The Bridge Loans are given against property or collateral and thus are secured loans.
The name is bridge because you take these loans when you know that you will have an income in your way very shortly, but at the moment you need cash. These loans are common or you might have seen someone taking this from a real estate background. The Bridge Loans are a very useful means when you are closing on a business deal but are in requirement of small lending help in the form of money.
The loan is availed for an amount that is worth of 70-80% of the property that you provide as a security to the lender. Being a secured loan, the interest rate is not that high compared to other short term unsecured loans. A quick recap of the features and positives about this loan can be viewed as follows:
You can avail a very huge amount given that your collateral is a good one.
It helps you clear all financial dues you have to close very urgently.
Interest rate is not sky-rocketing and is manageable.
You have got a flexible repayment schedule and this would mean a lot as it pulls off all the heat that revolves after taking a loan.
It is very rare to hear or face someone who isn’t aware or hasn’t heard about Personal Loans. Given the Types of Personal Loans Available in India, you must know about them, their exact purpose, and the types or needs they are designed for. Personal Loans are short term loans that are extended to meet your personal needs. The requirements can be any and based on the use, there are several types of Personal Loans such as Personal Loan for Marriage, for Home Renovation or Child’s Education or Travel or for a combination of expenses.
The rate of interest for these loans is high as there is no collateral required for this loan. Based on the conditions that have been laid out by a lender, the amount that can be lent to you is decided. Your credit score and income level will affect the chances of availing a Personal Loan. You can avail fast disbursal from modern lenders such as MoneyTap Personal Loans.
The features can be summarized as below:
Collateral is not required.
Interest rate is typically high.
Processing is faster with minimum requirements of documents.
Fast disbursal of the loan amount.
This loan is similar to our daily life Credit Card. You can avail money usually for a maximum of 30 days, without any interest being levied on the amount taken. The borrowers are given a certain limit on the amount that can be used and repaid. One will be charged with interest only for the amount that he or she utilizes and the interest rate is not levied for the maximum limit that is available as trading credit for an individual. There are options on this Credit Loan, and it is up to you whether you will repay the whole amount within the stipulated time of 30 days or can opt to convert into Equated Monthly Instalments (EMI).
You don’t get all the perks that are available with other loans such as those with Personal Loans.
This loan is available with most of the financial institutions, and this includes almost all the banks and NBFCs.
Purpose of using this loan is solely up to your discretion and has no significance in revealing them.
Amount can be borrowed at any time as per the needs.
Flexibility in repayment options and tenure.
If you have a current account, then this loan is available to utilize as per your needs. There is an Overdraft limit, within which the amount can be drawn in addition to the current balance. Overdraft on loan is greatly helpful in the times when money is required critically, but there isn’t sufficient balance in the account to withdraw. The interest rate (that is usually less than that on the Credit Cards) is imposed on the amount that has been withdrawn from the Overdraft Limit. But one needs to be cautious while considering the overdraft loan as a good alternative because it could incur extra charges and other fees that you would need to pay in total.
Do you know that you can put your insurance policies and few savings instruments as security to avail a loan? These loans are termed as Demand Loans because you are taking this loan as per your demand and the severity of the financial crisis. The maturity value is taken into consideration and based on how much percentage of them stick to their policies, lenders decide the amount that can be made available on demand. It is important to note that only a few insurances qualify to be considered as the worth of availing a loan and not all of them.
Now that there is sufficient information on what are Short-Term Loans and what are the types available, you can opt for the one based on your demand, requirements, and urgency. EMIs are easy methods to repay a loan amount within the tenure, and finally, it is up to you to decide which one will suit best for you. Borrow only that much amount which is necessary for you and repay within a flexible tenure.
To apply online for Credit Cards, Secured Loans and Unsecured Loans, visit www.mymoneymantra.com, the leading online lending marketplace that offers financial products from 70+ Banks and NBFCs. We have served 2 million+ happy customers since 1989.