All Your Questions on Short Term Personal Loans Answered Here
Owing to COVID19 pandemic and subsequent lockdowns, monthly income of households have been drastically affected. People are facing blues managing their EMIs, Credit Card bills, essential expenses, SIPs and much more with constrained cash flows. While some have paused EMIs by opting for Moratorium, there are others, who are trying frugal living; or seeking out additional funds to sail through these testing times.
Despite adequate savings and emergency fund back up, a hand holding to protect the financial future is vital for many. Payments are delayed, salaries have been cut and it will take some time, before the cash flow will be normal again.
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Whether you are looking for a small bridge loan to pay out for urgent medical bills or for insurance premiums, kid’s school fee or other essential expenses, it is recommended to understand how a Short Term Personal Loan works. We have compiled here a list of Frequently Asked Questions for your convenience, so that, you can apply for loan online, without any hassle from your home.
✅ 1. What are Short Term Personal Loans?
Ans: A Short-Term Personal Loan is an unsecured loan for up to 12 months. You can borrow these loans instantly through your laptop or mobile app. Disbursed as all-purpose loans having no restriction on end-use these loans are often borrowed as Emergency Loans or Bridge Loans.
✅ 2. Is there a difference between Short Term and Regular Personal Loans?
Ans: A Short Term Loan is comparatively borrowed for a shorter duration of time than a regular Person Loan. These are borrowed to meet the cash flow gaps for a few months. On the other hand regular Personal Loans are high-ticket loans for longer duration, ranging up to 5 years.
✅ 3. Does rate of interest for online Short Term Loan vary from regular Personal Loan?
Ans: No. As Personal Loan Interest Rates vary across the lenders, the rate of interest for short term Personal Loans also vary across the lenders. For instance the rate of interest offered by an PSB, pvt bank, NBFC or an e lender will greatly vary. The banks set interest rates on the basis of benchmark lending rates. Currently Personal Loan Rates for popular banks start from 10.75 p.a. The rate of interest by NBFC and online platforms are a bit higher, but they offer more flexibility in terms of eligibility criteria.
✅ 4. Where can I avail of Short Term Personal Loans?
Ans: You can avail of a Short Term Personal Loan from a bank or an online lender. Due to covid19, most banks have enabled Personal Loan borrowing through internet banking or mobile app. For instance you can borrow HDFC Personal Loan online for up to Rs 45 Lakhs. In fact the bank has also launched a Step-Up EMI structure for first 12 months of an Instant Loan. That being said, you can also explore Short Term Loans through app-based lenders.
✅ 5. How do I check eligibility for Short Term Personal Loan?
Ans: If you want to borrow a Personal Loan Online from a leading bank like HDFC or SBI, your eligibility will primary be assessed on the basis of your existing credit mix and net income. However if you choose to borrow from an app-based lender like CASHe or MoneyTap your social media activity and credit card repayment history will considerably impact the eligibility. You can check the eligibility by using an eligibility calculator online. Most lenders assess eligibility for Short Term Personal Loans instantly online.
✅ 6. What are the benefits of Short Term Loans?
Ans: A lot of people opt for Short Term Loans for tapping benefits such as: 1) These are instant loans and available as emergency credit facility. You can use these loans for urgent bills, temporary cash gaps etc. 2) You can apply without visiting the branch as these are contactless loans. The process can be completed online through a laptop or a smart-phone. 3) It is paperless process requiring e-copy of your PAN and Aadhaar only. 4) Repayment is flexible and without any foreclosure charge. You can choose tenure and EMIs as per your needs.
✅ 7. What documents are required to apply for a Short Term Personal Loan?
Ans: You will only require an Aadhaar Card and PAN card to apply for a Short Term Personal Loan. Besides, a valid and active mobile and email should be linked to the Aadhaar Card to process the request. Also, the information on Aadhaar and PAN should match. If there is any correction required, it should be done before applying for the loan online.
✅ 8. What is the repayment tenure for Short Term Loans?
Ans: Short Term Loans are generally offered as instant cash loans for three months to 1 year. Leading lenders like HDFC Bank, SBI & alike, however offer for longer repayment terms as well. Thus repayment tenure generally varies across the lenders.
✅ 9. What are the eligibility criteria for Short Personal Loans?
Ans: Apart valid Aadhaar and PAN Card, the applicant of Short Term Personal Loan should also have a regular income source. The minimum salary requirement may vary from Rs. 15,000 to Rs. 25000 as per the lenders’ credit policy. Also, generally the age requirement would be anywhere between 21 years to 60 years of age.
✅ 10. What is the mode of repayment for Small Loans?
Ans: The repayment of loan is mostly flexible and thus mode of payment is also flexible. You can repay using any of the online payment methods like bank transfer or auto debit mandate. Some lenders may also allow payment through cheque.
✅ 11. Do I require collateral for an Instant Personal Loan?
Ans: No. Like regular Personal Loans, these loans are also offered as unsecured offering, subject to meeting eligibility criteria. You do not need collateral or any guarantor for applying these loans.
Now that all your queries pertaining to Short Term Personal Loans are answered you can compare the best offers available and make an informed decision with confidence.
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