A short term personal loan is quite useful if you need quick cash to cover your expenses. A short term loan is an unsecured type of loan available to anyone with a regular income. A short term personal loan is very different from a traditional personal loan. These loans are provided for a short tenure of less than a year.
However, the loan amounts, interest rates and repayment period may vary for banks and lending institutions offering short-term loans. To apply for this loan, you can check with the nearest banks to see if it provides short-term personal loans, or look up for online lenders to find one that may offer loans based on the terms you desire.
Benefits of Short-Term Loans
The following are the benefits of applying for a short term personal loan:
- Instant Cash: If you require quick money in a short period, you can apply for a short term personal loan. You can easily cover an unexpected expense or priority payments with the loan funds.
- No Collateral Required: Being an unsecured loan type, you are not required to pledge any collateral on loan. You can get the funds you need without risking any of your valuable assets.
- Bad Credit is Eligible for a Loan: If you have bad credit or a low score, you may still get approved for certain short-term personal loans. As long as you have a regular monthly income, you can get access to fast cash.
- Short Term Commitment: The best part of short-term personal loan is it is a short term commitment and does not go on for years. Once you get the funds, you can repay the total amount and move on.
- Flexible Loan Repayment: Some short-term personal loan lenders offer a flexible repayment plan suited to your specific needs and preferences. You can make flexible payments as per your convenience.
Short-Term Personal Loan Interest Rates
While a short term personal loan can get you instant money, it is also an expensive way to borrow money. Many short-term personal loans have higher interest rates on the loan amount. The rate of interest charged will depend on the lender you apply for a loan with. Factors like the type of short-term loan you opt for and your financial history will influence the short-term personal loan interest rates. While these interest rates vary widely, payday loans may charge up to 400% annual percentage rate (APR), excluding all the possible fees to be paid. It is essential to do research and compare offers, and find the best interest rate you can qualify for rather than just accepting the first loan offer that comes your way.
How to Get a Short Term Personal Loan?
Numerous lenders offer online processes to apply for a short-term personal loan. The application process for a short-term personal loan is quite simple. They are as follows:
- Check Your Credit Score: Your credit score will give you an idea of whether you are eligible for a loan. The lender will see an individual with a low credit score as a high-risk borrower. However, you can always work towards improving your score and apply for loans. With a high credit score, you can get a better interest rate on the loans.
- Explore your Options: Not all lenders that offer short-term personal loans provide the same benefits. Look around for other lenders and what they have to offer in terms of short term personal loans and find a reputable lender that can provide you with an interest rate and term you can afford. Make sure to check whether you fit in the lender’s eligibility criteria for quick loan processing.
- Submit the Required Documents: While applying for a loan, you have to submit a set of documents with the lender. Gather all your personal and financial documents such as your ID proof, address proofs, bank statements and tax forms
- Application Process: The application process for short term personal loans varies from lender to lender. However, it’s often short and can be done online, and requires you to apply along with the documents. You can also apply for a personal loan using a personal loan app.
- Loan Approval: Many lenders approve the loan applications for short term loans on the same day it was applied. Once your application is approved and agrees to the loan, you’ll receive the loan funds in no time. The money will get disbursed via direct deposit to your bank account.
Smriti Jain is the owner and senior content publisher at Financesmarti. Financesmarti is a website where she shares a lot of useful stuff for the people and business of India. This includes small business ideas and other banking information, as well. Smriti completed her education in science & technology from Delhi University. Smriti usually has interests in digital marketing now, and she has chosen this career for the full-time opportunity. The primary purpose of starting this blog to provide quality information on the banking industry to the people.