Medical emergencies, sudden unexpected expenses on the personal front, or cash shortages – can affect all of us at any time. During these challenging times, raising cash immediately becomes a huge struggle for all.
This is where – short term personal loans come into the picture. This article shows you all that you need to know about instant short term personal loans – features, benefits, eligibility, how to apply, and more.
What are short-term personal loans?
As the name implies, a short-term personal loan is offered to borrowers for a short tenure, usually lesser than one year. It helps borrowers meet their immediate financial requirements. You can borrow from a few tens of thousands of rupees to 25 lakhs or 50 lakhs, depending on your financial profile.
Generally, short-term personal loans are taken for:
Urgent home renovation expenses
Wedding and other family function
To meet a shortage of cash, etc.
Features of Short-Term Personal Loans
Instant Approval – Most lenders approve short-term personal loan applications within a few minutes/hours.
Immediate Cash – The sanctioned loan amount is credited in the borrower’s bank account within 24 hours.
Minimal Documentation – To qualify for an instant short-term loan, all you have to do is provide the essential documents like PAN card, ID proof, and address proof.
Pre-approved Offers – Most lenders offer pre-approved personal loan offers to existing customers. Customers who qualify for these offers do not have to provide any documentation and can borrow instantly, with just a few clicks.
Online Loan Account – Look up your loan repayment schedule using an online loan account.
Collateral-free – Generally, short-term personal loans do not require collateral or a guarantor.
Short Tenure – The loan repayment tenure generally ranges from six to twelve months. Some lenders even extend the tenure up to 24 months.
Benefits of Short Term Personal Loans
No Need for Collateral
Personal loans are unsecured loans – meaning, you don’t have to pledge any asset or collateral to avail the loan. Additionally, you don’t have to look for a guarantor to guarantee the loan on your behalf.
No restrictions on Fund Usage
This is one of the biggest perks of short-term personal loans. Unlike other loans where usage of the loan amount is restricted, you can use the funds for any purpose – a medical emergency, home renovation, family functions, vacations, etc.
Instant Approval and Quick Disbursement
Short term personal loans have fast approval with minimal documentation. The application process from approval to disbursal is mostly handled online, and the sanctioned funds reach your account within a few hours.
Competitive Interest Rates
Thanks to the availability of a large number of lenders – banks, NBFCs, digital platforms – personal loan interest rates are highly competitive. You can search around to find the lowest interest rate you’re eligible for. This helps you reduce the overall loan burden, making the loan manageable.
Improves your Credit Score
If you're looking to build your credit score, then taking a short term personal loan is highly beneficial. By paying the EMIs regularly and on time, you can significantly increase your credit score, boosting your chances of securing other credit in the future.
Eligibility Criteria for Short-Term Personal Loans
The actual eligibility criteria vary from one lender to another. Here we list out the general conditions that you must fulfil to avail a short-term instant personal loan:
You must be aged 18 or more. The maximum age limit is generally 60 for salaried individuals and 65 for self-employed professionals.
You must be an Indian citizen.
You must meet the minimum income criteria of the lender.
You must have minimum work experience and hold a stable job.
*Note that these criteria are just indicative and vary based on the lender. Make sure to check the eligibility criteria specified by your preferred lender before you start the application process.
Documents Required for Short-Term Personal Loans
The list of documents required is quite essential, and you generally have to provide the following:
ID and address proof
Proof of employment and income
Note that the actual list of documents varies from one lender to another.
How to apply for short-term personal loans?
Short-term personal loans are readily available in India. From public sector banks to P2P lenders, the options are many. In this section, we list out the steps to be followed while applying for a short-term instant personal loan.
Step 1: Compare and Evaluate Lenders
With so many lenders offering short-term personal loans, the first step is to compare lenders based on – interest rates, processing fees, late payment penalties, customer service quality, etc. To make your job easier, we have a complete list of various lenders in the Indian market. Use our guides to compare and shortlist lenders who offer you the best deal.
Step 2: Check if you meet the Eligibility Criteria
Once you have shortlisted a couple of lenders, you need to check whether you meet the eligibility criteria. Visit the website of the lender to verify your eligibility. Most lenders offer a free online eligibility calculator to make it easy to see if you qualify.
Step 3: Fill the Online Application Form
Once you have zeroed in on the lender and checked your eligibility, the next step is to fill in the loan application form. You will have to enter basic details like – your name, contact details, work experience, income details, etc. Additionally, you have to specify the loan details like – require amount, tenure, repayment mode, etc.
Step 4: Approval and Sanction
This is the final step. Once you submit the online application, the lender verifies your eligibility and reaches a decision on your loan application. Once the loan is approved, you will receive the funds directly in your bank account.
Meet your Emergency Cash Requirements with a Short-term Personal Loan
If you need cash immediately, then a short-term personal loan is the right choice. Though short-term personal loans have higher interest rates than regular loans, the overall loan burden is significantly lower. This is because you repay the loan within a short tenure, thereby reducing the total interest you pay.