The short term loan is a distinct category of credit. It ranges from Rs. 10,000 and Rs.2 lakhs, with repayment periods of up to 3 months. Most banks and NBFCs in India impose a minimum cap of Rs.1 lakh. This becomes an obstacle for those who are in need of small funds.
But there are certain benevolent NBFCs that offer short term loan at competitive rates and easy repayment options. You can avail these services and get yourself through financial turmoil.
What is the short term loan?
There are many people who still wonder what is a short term loan. It is actually a credit system which is taken from the peer. It combines the benefits of crowdfunded loans with a short span of repayment. It is tailored to serve the needs of people who need a small loan for a temporary fix.
A short term loan in India can be especially useful in the following situations:
Individuals seeking a loan for a short span
Let’s say you have a good credit performance in the past, and need a small fund for a comparatively short period of time. You can apply for a short term loan with any of the reputable banks or NBFCs in India.
You can easily get funds of about Rs.50, 000. You would typically have to repay within 1 to 2 months.
Individuals with a significantly high DBR
There’s no denying that some situations demand urgent funds within a short notice. If you are in need of money, but don’t fulfil the PL criteria of banks and NBFCs, the short term loan is an option you can consider.
Individuals working in unlisted companies
People in big multinational enterprises enjoy reduced rates of interest, and favourable terms and conditions. If you work in a small, unlisted concern, you can consider this option. Short term loan interest rates are quite smaller, and provide a host of options.
Individuals who don’t have a lot of experienced
This is the primary reason why many loan applications get rejected at banks and NBFCs. Lenders are hesitant about people who lack a substantial credit history. However, the short-term loan is easily acquired. Even the documents required for short term loan are easy to submit; you can get your loan approved at the drop of a hat.
Individuals with poor credit scores
Bad financial decisions in the past reflect poorly on your present credit score. As a result, a number of lenders may have declined your request for a Personal Loan. However, that is no reason to be anxious; you can apply for short term loan and get it approved or you can improve your credit score to apply for personal loan.
You will just have to submit the documents required, and fulfil the eligibility criteria, to get the required loan.