What Are the Different Types of Short-Term Loans?

Travel, wedding, home renovation, or higher studies, you can fulfil all your aspirations with short-term loans. These loans provide immediate access to funds with minimal documentation, quick approval, and instant disbursal. Read on to learn about the types of short-term loans, their benefits, and how they work.

What Are the Types of Short-Term Loans?

1. Instant Loan
An Instant Loan is a collateral-free short-term credit that you can apply to cover education fees, marriage expenses, travel costs and other requirements. Trusted lending institutions like Poonawalla Fincorp offer an Instant Loan of up to INR 5 Lakh at competitive interest rates, with flexible repayment tenure and fast approval.

2. Credit Card Loan
Credit card loans enable you to access funds quickly with your credit card. This provides you with convenience and helps you make purchases or pay for expenses up to a pre-specified credit limit. Credit card loans come with rewards points and cashback offers.

3. Trade Credit
This facility is usually available for businesses. It is a type of interest-free credit in which a supplier offers you the facility to make purchases on credit and pay later. The duration extends up to 30 days; you can also request longer tenure to arrange for the funds.

4. Bridge Loans
Bridge loans are also known as ‘gap financing’ or ‘interim financing.’ It is a temporary financial solution. Businesses can avail of this type of loan during the waiting period for permanent financing or a big loan.

5. Demand Loans
You can secure demand loans against insurance policies or other savings instruments. It allows you to borrow a certain percentage of the total value of these savings instruments or insurance policies as determined by the lender.

6. Overdraft or Flexi Benefits
Overdrafts or flexi benefits allow you to borrow against your current account balance up to a certain limit. This facility allows you to withdraw funds from the bank even with a zero-account balance.

Also Read: Getting Rapid Financial Support with 1-Hour Loans by Phone

What Are the Features of Short-Term Loans?

The features of short-term loans that make them the go-to credit option are:

• Instant Processing and Approval: Various lending institutions offer short-term credits with quick approval. However, your application form must be error-free and meet the eligibility criteria.
• No Restrictions on the End-use of Funds: There are usually no restrictions on the end-use of these funds. So, you can use this money to fund your dream vacation and cover education fees or any other expenses.
• Simple Application Process: The application process for short-term loans is simple and hassle-free. You can apply for a short-term loan online. This eliminates waiting in a queue or dealing with complicated paperwork.
• Complete Transparency of Charges: These loans do not have hidden charges, so you can calculate the overall costs beforehand and know the exact borrowing cost.
• No Foreclosure Charges Present: With short-term loans, you do not have to pay any additional charge when prepaying or foreclosing the loan. So, you can pay off the loan and be debt-free soon.
• Substantial Loan Amount Available: Several lending institutions offer a short-term loan of up to INR 5 Lakh. This amount can easily cover multiple types of financial emergencies without any hassles.
• Simple Eligibility Criteria Present: Short-term loans usually have simple eligible criteria, making securing a loan easier.

Steps to Apply for a Short-Term Loan

Follow below-listed steps for an easy and fully digital journey:

• Step 1: Click on the ‘Apply Now’ button.
• Step 2: Fill in the required details on the loan application form.
• Step 3: Upload necessary documents.

On successful verification, the loan amount will be disbursed into your bank account instantly.

To Conclude

Short-term loans ensure that you get access to funds to meet your immediate personal and business finance needs. With the availability of multiple types of short-term loans, you can choose the one that suits your needs. However, while applying for a short-term loan, do your research well, evaluate each type, and select the one that provides the maximum benefits.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply