Short-term loans are usually given to individuals who require money for a short period. This short tenure is between a month and a year. People who cannot get loans from a reputed lender or a bank for a longer period opt for this loan. Short-term loans are not secured loans. This means that there is usually no security deposit involved in this case. Individuals do not need to provide any property or money as a security deposit for their loan amount.
Benefits of taking short-term loans
A short-term loan is also known as short-term finance or short-term installment. Generally, people with bad credit opt for this loan as a quick fix. This is because short-term loans have the best benefits and features. Some of these features include:
- Zero Collateral
Short-term personal loans for bad credit are unsecured. There is no need for any collateral as a security deposit in exchange for your loan amount. Customers who have no collateral to submit as a security deposit find this feature pretty beneficial and convenient.
- End-use is flexible
Short-term loan is considered to be a multi-purpose loan. These loans are generally taken for a vacation, home renovation, organizing a wedding, education bills, business expansion, or any medical emergencies. Its end-use is extremely flexible.
- Quick disbursal
The disbursals for short-term loans are much quicker compared to long-term loans. This is because customers are not required to provide any documentation to take the loan amount or other assets. None of these need to be pledged.
- Minimal documentation
Short-term loans demand minimal documentation or paperwork. Customers find it convenient, easy, and fast to complete the whole documentation process.
The tenure for short-term loans is generally for a short duration. These loans can be easily approved and repaid. There would be no financial burden on the individuals. The range of the tenure might be either one month or a year.
- Loan amount
Individuals who opt for short-term loans need to meet basic needs such as paying medical bills, wedding expenses, family vacations. The minimum and maximum loan amount depend on the lender from whom you are taking the short-term loan. Customers can pick any loan amount depending on their requirements.
Who is eligible for short-term loans?
It is pretty easy to apply for short-term loans with bad credit. However, there are eligibility criteria that need to be met. These criteria include:
- The individual needs to be a resident of India.
- The individual applying for the loan needs to be self-employed and have a decent salary.
- Individuals need to be at least 21 years of age and below 60 years old.
- The income of the individual needs to be at least fifteen thousand. However, some lenders also accept an income of twelve thousand.
The above-mentioned criteria can vary from one lender to the other. It is better to check with the lender regarding their eligibility criteria before applying for the short-term loan.
Required documents for Short-term loans
Though the documents and paperwork required for applying for short-term loans, some basic ones are important. These basic documents are important to provide for the complete sanctioning of short-term loans. Some of these important documents include:
- PAN card
- ID proof
- Residence proof ( Driver’s license/ Passport/Electricity bill/Voter’s ID)
- A passport size photo of the individual
- Bank statement for the latest three months
Just like the criteria factor, these documents might also vary from one lender to the other. It depends entirely on your lenders what documents they require. You can talk to your lender regarding these document requirements before opting for the Short term personal loans for bad credit from them. It is imperative to find a trustworthy and reliable lender who can give you short-term loans even when you have bad credit. There will be no trouble if you have found the best lender.