An individual typically finds it challenging to satisfy his modest financial needs, such as those for a vacation, a wedding, the purchase of used two-wheelers, or any other necessities. It's not a good idea to borrow money from friends and family because it will eventually sour the bonds between them. On the other hand, you cannot take out a large personal loan obligation to cover a little financial requirement. So, your only choice is to submit an application for a short-term personal loan. A loan taken out for a duration of less than a year is referred to as a short-term loan, as the name implies. Both the borrowed sum and the repayment time are small and swift. Therefore, here you may view all of the Indian applications that provide short-term loans.
What is Short - Term Loan ?
A short-term loan is one that is taken out to meet a brief requirement for funds on the part of the borrower's person or business. Due to the fact that it is a kind of credit, it requires repayment of the principal amount plus interest by a specified due date, which is typically one year after the loan is obtained.
Particularly for start-ups or small enterprises that aren't yet qualified for a bank credit line, a short-term loan is a useful option. People who experience a brief, unexpected cash flow problem might benefit from short-term loans, not just enterprises.
Feature of Short Term Loan
Since lenders can't make enough money from loans with short terms, the annual percentage rate (APR) or interest rates are typically set high. The tenure is typically less than a year, and in certain situations, it's only 1-2 years, which results in less interest being accumulated. Due to the prolonged payback period and high interest rate associated with long-term debts, lenders profit more from these loans.
Since these loans are typically unsecured, lenders also levy a high interest rate to make up for the potential loss from failure. A loan that is unsecured lacks collateral, thus if the borrower defaults, there is nothing to sell in order to recoup the loan.
Since many lenders do not want collateral, they demand that borrowers have a high credit score to demonstrate that they are reliable when it comes to making repayments on time.
Additionally, in comparison to other loan types, the borrowing amount is typically modest.
Within the loan's duration, you must pay off the entire balance of the principal plus interest. For many, payments are due every week.
Many customers choose short-term loans from direct lenders since they do not involve any middlemen like credit brokers. A broker's delay could cause a borrower's loan to be delayed. Direct lending also frequently offers online services, quick approval times, and loan sanctioning for short-term loans. Due to this, direct lenders were in high demand on Covid-19.
Eligibility Criteria of Short Term Loan
You must be qualified to receive a short-term loan. You cannot obtain short-term loans if you are not eligible. Therefore, before applying for short-term loans, you must review the qualifying requirements that you must meet.
You should be at least 21 years old.
Individuals who are salaried or self-employed may be eligible for a short-term loan, though eligibility varies from application to application.
You should have a consistent source of income that brings in more than INR 12000 per month.
A Cibil Score of 600 or higher is required.
The applicant must be familiar with how to utilise the mobile phone's application.
Documents Required for Short Term Loan
If you want to apply for a loan using the Short Term Loan App, you should be aware that all of your supporting documentation must be submitted electronically. Prior to uploading the documents to the app where you are applying for the loan, you must scan the supporting documentation. The following are the key documents you must submit to apply for the loan:-
The Aadhaar Card
Card PAN
Salary slip
Photograph
ITR and a bank statement
How to apply for Short Term Loan
Through the online application provided by the specific lender, you can apply for short-term loans. The steps for applying for a short-term loan are listed below:-
Open the App Store or Play Store on your smartphone.
Go online and look for the Instant Loan App to download.
To register, open the application and provide your basic information (such as name, cell phone number, etc.).
After registering, decide how much you want to borrow in loans.
As instructed by the app, upload the digital versions of the papers.
The loan amount will be credited to your account following the submission of appropriate documents and their verification.
