A short term loan provides urgent assistance for an individual’s financial requirements. As its name suggests, a short term loan would typically have a short tenure ranging from a few months to five years.
A short term personal loan is mostly unsecured too, meaning you will not be required to pledge any collateral to get the loan. A wide range of lenders, from banks to NBFCs, offer short term loans online, often involving minimal documentation, competitive interest rates and quick disbursals. These online short term loans, therefore, are usually a good option to meet emergency funding requirements of eligible borrowers.
Read on as we discuss short term loans in detail, including its features, benefits, eligibility criteria and document requirements.
Short Term Personal Loan Details
Up to ₹20 Lakh
9.9% to 45% p.a
Up to 72 months
How to Apply for an Online Short Term Loan?
You need to follow these steps to apply for short term loan from a financial institution:
Login to your lender’s website or download the mobile application.
Provide the basic details like name, address, PAN, Aadhaar, etc. as per requirement.
Check loan eligibility.
Fill in your desired loan amount (within the eligible limit) and tenure.
Complete KYC verification
Click on ‘Apply’ after reading the terms and conditions
Address proof (Driver’s license/Voter’s ID/Passport/Electricity bill or Phone)
There might be some additional document requirements depending on the terms and conditions of your chosen lender. Do get complete clarity about the documents and eligibility before applying for an instant short term loan.
Eligibility Criteria for Short term Loans
Nationality: Indian Resident
Age: 21 years to 65 years
Annual Household Income: ₹3 lakh
Type of Employment: Salaried or Self-employed
Cibil score: 650+
*Actual eligibility criteria could vary as per lender
An online short term personal loan with minimal documentation, paperless process and fast disbursal could be an excellent way to raise money, especially during a financial emergency. Bear in mind, applicants with a steady income and a good credit score usually get the lowest short term personal loan interest rates. However, ensure you take such a cash loan only if you have a pressing requirement, and repay it in full on time. A personal Loan would help you avoid steep interest penalties and a credit score drop that could adversely impact your future loan applications.
What are the types of short term loans?
A short term loan is essentially an unsecured loan that could be used for a wide range of requirements. They could be categorised as personal loans, instant cash loans, line of credit, marriage loans, travel loans. etc. with or without similar terms and conditions.
How does a short term loan work?
Once an individual applies for a short term loan, the lender would quickly evaluate his/her eligibility by checking KYC details, income, and credit score. If satisfied, the lender would present a customised loan offer based on the eligibility, which, if approved, would be quickly transferred to the applicant’s bank account. The process could vary as per lender, but would be even faster for pre-approved applicants.
Are short term-loans risky?
Short term loans carry high risks for a borrower who is unable to balance its short repayment period and high-interest rate. Therefore, borrowers must consider this associated risk before opting for short term loans.
Are there any extra charges for short term loans?
Lenders charge penal charges and late payments for missing a repayment or paying after the due date. They also charge processing fees for short term loans.
Do short term loans affect a borrower’s credit score?
No, short term loans usually do not affect an individual’s credit score. However, missing an EMI date or defaulting on a short term loan can disturb their credit score.
What is the tenure for a short term loan?
The tenure for a short term loan can vary from one bank to another. A short term loan’s tenure usually ranges from 1 month to 1 year.
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