Sometimes, some additional capital is required than what we have in our savings. The purpose usually includes urgent home repairs, higher education costs, last-minute travel plans, etc. That is when a short-term loan provides the required funds to cover the expense. Paying for such expenses with a loan distributes the cost into EMIs and streamlines financial management without touching your savings. If you need quick cash for immediate needs, get a Personal Loan for a short term and repay it on time to build your credit score. Let’s find out more.

What is a Short-Term Loan?

As its name suggests, a short-term loan is meant for a short duration. Everything from application to disbursal and repayment is quick. You can quickly apply for the loan you need using a digital loan app. The lender verifies and approves the loan through automatic verification and disburses the loan amount directly into your bank account shortly. The repayment tenure for these loans is also quick, starting from 6 months. 

Features of a Short-Term Loan

Let’s look at the features of a short-term loan:

Small Loan Amounts: The primary purpose of short-term loans is to take care of emergency expenses. Therefore, you must understand the financial urgency, evaluate the expenses and the required amount, and borrow diligently. The loan size depends on your eligibility, income, debt-to-income (DTI) ratio, credit history, and repayment capacity.

Faster Repayments: Once you receive the loan amount, you must repay the principal with interest within the chosen tenure. Using an EMI calculator, you can choose the shortest possible repayment tenure with budget-friendly EMIs and become debt-free quickly.

Easy Qualification: The biggest reason for the high demand for short-term loans is their easy eligibility and qualification requirements. Lenders request a few necessary details and documents and sanction the loan instantly. Many loan apps in India claim to approve the loan in a few minutes.

Why Apply for Short-Term Loans?

You may apply for a short-term loan for many reasons without any usage restrictions. These include the following:

• Financing Immediate Requirements: Sometimes, cash is not enough to meet some financial needs. For instance, you might need money to pay your child’s admission fee to a new school, or your home needs an urgent repair, and you are not financially prepared for it. In such situations, you can take a short-term loan to cover the cost and repay the loan in easy EMIs. Similarly, you can book urgent tickets with the loan amount. 

• Emergency Cash Needs: These small loans are specifically useful in emergencies. They take care of urgent capital needs like medical bills, appliance repair, last-minute wedding expenses, etc. 

• Purchase an Expensive Appliance or Gadget: You may use a short-term loan to purchase an expensive appliance or gadget. With this strategy, you can buy a better model beyond your budget and repay its price in monthly instalments.

A short-term loan is unsecured, meaning you can borrow it to tackle cash flow problems without pledging any security against it. An ample loan amount, easy eligibility and quick disbursal are some features that make these loans the best funding option for immediate financial needs.