A short term loan comes with a lower interest rate, easy eligibility criteria and a simple application procedure. Such a loan is beneficial for debt consolidation, meeting personal expenses like higher study, marriage, medical expenses and several other purposes.
However, before availing a short term personal loan, borrowers must know the application process, besides its eligibility criteria and documentation.
What are the steps to apply for a short term personal loan online?
Followings are the steps to apply for a short term personal loan online:
Step 1: Browse the website of the respective financial institution.
Step 2: Under the loan section, click on the personal short term loan.
Step 3: Enter your Aadhaar number.
Step 4: Under the loan amount section, fill up the required amount and repayment tenor.
Step 5: Upload the necessary documents.
Step 6: The documents will be verified by the authority.
The lender will sanction the loan amount after conducting all the necessary verification and only if the borrower meets the eligibility criteria.
For the ease of repayment, some financial institutions, like Bajaj Finserv offer flexi loan facility. While discussing flexi loans, one of the most important questions is; what is an overdraft loan?
An overdraft loan is a type of short term personal loan that allows withdrawing the principal amount multiple times. The borrower can repay the amount at any point in time before the tenor ends. This form of NBFC personal loan can be used to fund business operations as there is no restriction on usage.
Documents required for availing a short term personal loan
Documents necessary while applying for a personal short term loan are:
- Identity proof like Aadhaar Card, Voter Card or Driving Licence.
- Address proof like Utility bill, Passport, etc.
- Copy of PAN Card.
- Passport size photo of the applicant.
- Age proof like school leaving certificate, birth certificate, etc.
- Last three months salary slip or proof of income.
- Last six months bank statement.
- Form 16 of the last financial year.
- Proof of job stability and continuity, including appointment letter, confirmation letter, etc.
Eligibility criteria for availing a short term personal loan
Followings are the eligibility criteria to get a short term loan:
- Applicants should be an Indian citizen.
- Should be between 20 to 60 years of age.
- Employed and salaried with any multinational, private or public sector company.
- CIBIL score should be 750 or more.
To know the EMIs, applicants can use a personal loan EMI calculator available online and compute the total borrowing cost.
Features of a short term personal loan
The short term personal loan aims to support urgent financial requirements; therefore, its features are:
- Instant loan approval
On meeting the eligibility criteria, the loan gets instant approval.
- Collateral free
One can avail funds without pledging collateral. Therefore, it is helpful for those who do not have enough assets to offer.
- Minimum documents
Short term personal loans come with minimal documentation. Relevant documents and easy-to-meet eligibility criteria are two determinants of availing this credit instrument. Therefore, an individual must check all details before applying.
- Extended repayment tenor
Some financial institutions like Bajaj Finserv offer flexible repayment tenor of up to 60 months. In between this tenor, the borrower can repay the amount at any time. One can also avail personal loans to better manage business growth.
- Low EMIs
Borrowers can opt for interest-only EMIs, which can lower the cost of repayment by up to 40%.
To maximise the benefits of a personal loan, many reputed lenders provide pre-approved offers to streamline the loan application. These offers are available on different financial products. Individuals can check their pre-approved offers by entering their essential details.
The short term loan is very helpful for those in dire need of immediate money. The online loan application procedure has made it easy, comprehensive, and transparent for all borrowers. However, before availing a short term personal loan, individuals should remember all the above-mentioned pointers to avoid financial loss.