Short Term Loan in India

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Short Term Loan in India

Are you having trouble paying your employees, suppliers, or even your kid’s fees? Well, if you are facing such a financial problem, this article is for you. Over the years, we have evaluated the inflation levels in India and its growing day by day. This has affected the way businesses operate and even people’s lifestyles.

It’s impossible to spend what you do not have which is why you need a short loan online. The financial boost gets you back on your feet and ensures the business or your personal life is running smoothly. In this article we are going to dive into understanding what short term loan is and how you can access it.        

Meaning of Short Term Loan

What is short term loan? A short time loan refers to funds given to you by a lending firm. The cash can either be personal or business, depending on your needs as a consumer.

They are unsecured, and you won’t be asked to provide property or cash as collateral for it to be approved. The period of short term loan is usually 1 to 5 years.   However, the duration given depends on the amount of cash you are requesting for.

There are various types of loans that one can opt for. They include

  •  Line of credit

It is a type of financial arrangement where the lender determines in advance the maximum loan to be borrowed. The firm reaches this decision after determining your creditworthiness. For example, you might have a good credit score, which allows you to be given Rs. 50,000. This means you cannot exceed this amount in your credit card or account.

  • Payday short term loan 

These are emergency short term loans which is expected to be paid in the next paycheck you get. Additionally, it is easier to access funds compared to other kinds of loans. However, you are required to repay the loan in a lump sum, including the high-interest rates. For one to qualify for these funds, you must have a steady income.

  • Invoice financing

The loan is meant for businesses and corporations that are having trouble paying their employees or suppliers. A good example is when you have requested for goods from a supplier and lack the cash to pay for it. What the lender does is request for an invoice and then calculate the interest before paying for the goods. Once this has been done, your business will be expected to pay the loan with accrued interest.

  • Merchant cash advances

It’s a bit different from other kinds of loan that one can subscribe to. What the lender does is give you the cash in advance and later take a percentage after the sales are made.

For example, if you are selling smartphones, each sale made the lender is entitled to a portion of the cash. This means when selling the phone at Rs. 3,000, the lender is entitled Rs. 300, which is 10% of the sale. The financial institution does this until the debt has been fully settled.

  • Online or installment loans

It’s one of the most convenient ways to assess funds. This is because you apply for a the cash through your phone or computer. The application is made online, where you fill the required information and attach your documents.

Once you have completed your application, submit it, and wait for a response from the lender.  This only takes a few hours or minutes to know if you have qualified for a business loan.

How can a short term loan help you?

Short term loans are helpful because of the benefits that come with it. Some of the benefits that one is likely to enjoy include

  • No collateral needed

When applying for the funds, the lender won’t request for your property to be a collateral. This is a feature that has proved to be beneficial to many who have nothing to pledge. Hence, they are able to obtain the funds easily and use them in their business or personal issues.

  • Minimum documentation

In the past, there was a mountain of documentation that was required before your loan request was approved. However, this has changed today, and one can apply for the funds online through an app or website. Plus, the banks have also embraced technology and shifted their services online, making it easier to get short term loans. 

  • Loan amount

In India, the short term loan amount starts from Rs. 5,000 extend up to Rs. 3,000,000. This means that you can receive a good amount of cash that helps to sort out your needs.  If you are thinking of taking a trip or organizing for a wedding and lack the cash, this is the best loan for you.

  • Quick disbursal

Once the loan request has been approved, you will receive the cash faster than long term loans. The reason for this is the minimal paperwork the firm goes through. It only takes between 2 hours to 5 working days for the funds to be sent to your account.

  • Flexible end-use

There is no restriction when it comes to short term loans. It means you can channel the funds to a different project, and no question shall be asked. Hence it is the best loan to opt for. 

  • Flexible loan tenure

Having a flexible tenure also makes the loans one of the most preferred products in the country. The short term loan period ranges from 1 month to 12 months. Therefore, you will manage your loan easily and fast to avoid entering into a debt cycle that lowers your credit score.  

How to apply for a short term loan?

The application process is easy, and one is able to complete it within minutes. Here is how to apply for the funds online or offline.

  • Online

When it comes to the online platform, it is an easy process. All you need to do is identify the firm that you see is fit for your needs. Once this is done, go right ahead and apply for the funds. Nonetheless, it is important to take note of the documents that are needed for the loan to be approved.

 Some of the most important documents include your ID, income statement, and address proof. Additionally, ensure you read the terms and conditions of the lender before submitting your application. This helps you in identifying if there are hidden charges. The short term loan payday can be applied directly through the firm’s website or an app. 

  • Offline

The offline loan application is not different from the online one. The difference is you have to visit one of the branches near you for the loan to be processed and approved. The firm needs to check your valid documents and even give you a chance to ask questions before the loan is approved. This will give you a deeper understanding of the firm’s policy and the loan. 

A short-term loan with bad credit

 Even with a bad credit score, you can still get a short term business loan or personal loan. Hence, this should not stop you from seeking financial aid from these lending firms. Here are some of the things to do to acquire funds regardless of the poor credit score.

Ø  Checking the credit score

This is an important task to undertake before applying for a short term loan with bad credit from any institution. Ensure you go through your personal details keenly and check for any inaccurate information. If there is any issue, investigate, and later correct it to ensure your credit score is on point.  This, in turn, increases the chances of your loan being approved. If you want to receive a short term personal loan no credit check in India, you should try.     

Ø  Research about the different lending firms

You need to look into the various firms that are in the market and offer the same loan services. This helps you to narrow down on a particular firm that is in line with your needs. This is because there are firms that perform a hard credit pull while other soft credits pull. This helps you to know the firms which will accept your poor credit score and still grant you the funds. 

Ø  Once the loan has been approved review the terms

The moment you have received the funds in your account, look at the term and condition of the lender. In this section, they explain more about what happens to one who has a bad credit score loan. The firm shall clearly explain the fees, due dates, monthly payments, among other things that one attracts for using this product.

Ø  Short-term loans for business

We understand that business does not thrive all the time. Sometimes you might need a financial boost to pay your suppliers, employees, or even add inventory. An instant  short term loan for business is the best product that will see you through the hard economic times.

The loan can be applied for online, and within a few minutes, it has been approved. Which makes it more convenient than the traditional loans where one had to wait for weeks before the loan is approved. Moreover, the loan is unsecured and has a flexible tenure of up to 36 months.

For your business to qualify for the loan here are some of the requirements

The business has to be registered. Therefore you will be required to provide a valid registration certificate.

  • Your business has to have an annual turnover of Rs. 2,400,000. This is seen from your bank statements, which date back to the last financial year or 12 months.
  • A chartered accountant must have audited the financial records in the previous year.
  • The business must have been operational for a period of one year or more.
  • There should be an income tax return statement to prove you have been filing returns. The document should date to the previous 1- 2 years.   

Best short term loans app in India

There are various lenders that one can find on the online platform. Some of them are genuine and have no hidden charges, while others are after making profits. You need a firm that understands your needs, therefore we have taken a look into some of the best short term loan app.

        1. Fullerton India

The firm is registered as NBFC- Investment and Credit Company with the Reserved Bank of India (RBI). This shows it is legit and secure for you to use their services. Fullerton India began offering its service in 2007 and has grown to become one of the most sorted after firms in the country. 

Features

  • The firm offers personal loans up to Rs.25 lakhHave a flexible interest rate of 12.99% for salaried and self-employed. The maximum loan interest rate is 36%.
  • Another amazing feature is that you can get a top-up loan on the outstanding principal amount.

         2. Paysense

The company was started in 2015, and it is based in Mumbai. The Paysense has partnered with the IIFL, which is registered under RBI.

Features

  • There is no credit score needed for the loan to be approved
  • The firm provides you with easy to manage Equated Monthly Installment plans to make it easier to repay the credit.
  • The interest rates start from 1.4% to 2.3% per month, and the loan starts from Rs.5,000 to Rs.2.

        3. Moneyinminutes

This is a lending firm that is owned by Tushar Leasing and has a registration number 060271. The RBI also regulates the firm. The firm was started in 2016; hence if you are looking for short term cash loans, they are the best.

Features

  • The firm offers bad credit loans to individuals.
  • They also offer loan amounts starting from Rs. 10,000 to Rs.10,0000.
  • The loan tenure starts from 60 days to 180 days.
  • The firm has different interest loan products that you can subscribe to. For example, loans that take up to 5 days the interest rate is 0.10%/flat/day, which accumulates to 36.50% p.a.

 Conclusion

A short term loan online is the best since it comes with benefits, and its easier to access than long term loans.  They have flexible interest rates and loan tenure that makes it convenient. Additionally, it improves your credit score, making it easier to get long term loans in the future. 

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Frequently asked questions

The citizens of India aged 20 to 65 years old.

It depends on the conditions of the particular bank or MFI. On average, from Rs.1000 to Rs.10 Lakh.

You need to submit an application on the website of the company or in a mobile app.

Processing of the application will take from several minutes to several hours, and crediting of money to your bank account will take from 1 to 5 days, depending on the selected company.

You can spend this money for any purpose: holidays, weddings, the latest gadgets, higher education, buying a car or even repairing a house.

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