April 10, 2020
A short-term loan is a credit offered by financial institutions to borrowers for a short span of time, usually ranging from 1-2 years. These are mostly emergency and one-time loans that come in handy when you can’t get a long-term loan. It is also an unsecured loan which means you don’t have to pledge any collateral as a security to get the loan.
The reason why it’s called a short-term loan is mostly because of its repayment term. The interest on these loans is payable on the principal amount. The funds are disbursed quickly and the loan must be paid off in 6-18 months.
The attractive attribute of this loan as compared to the other loans is the ability to avail it quickly, less paperwork and easy approval. The interest rates may be higher due to the small tenure of repayment, but it is still a good credit option nonetheless as compared to conventional loans.
Eligibility Requirements for Short-Term Loans
Following are the eligibility requirements for getting a short-term loan. It usually depends on the lender, but these are the basic requirements asked by the financial institutions -
- Age must be 18 or above
- Applicant must be a citizen of India
- Should have a Savings Account
- Must be a salaried person or self-employed
- Should have a stable income or good credit history
Documents Required for Short-Term Loans
In addition to the requirements, there are few documents required to avail short-term loans. They are -
- Proof of identity
- PAN Card
- Residence proof
- Bank statements
- Income proof
- Age proof
- Employment proof
You can give these proofs via your Aadhar Card, Passport, Driving Licence, Voter ID, Form 16, Rental Agreement, Salary Slips and more documents as such which will be prescribed by your lender.