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- The longer the term of the loan, the more interest would be required to pay by you. Short Term Loans usually have lower interest rates when compared to long term loans since the time required to repay the loan is minimal which turns beneficial for you. To sum up, in long term you would save more money by applying for a short term loan than for a longer term.
- It is easier to predict your finances for a shorter period of time than for a longer term. Sometimes it becomes challenging to predict the financial condition of a company in future. With longer term loans you may be required to repay the loan back in 10-12 years and the coming years may or even may not be good.
In case of you cannot obtain credit from bank for longer term, you can opt for these one timer short term loans. The repayments in this type of loan is structured and organized to match your cash flows. It is an unsecured loan but some of the lenders be it banks or financial institutions may need to secure these loans by asking you to pledge some collateral against it. Short term loans can also be paid back inmonthly installments and thus it is also known as Short Term Finance or Short term Installment loans.
Banks and various financial institutions have different criteria and requirements for approving the short term loan. But Lenders generally check your credit score before they sanction your loan application. There are some common requirements for all financial institutions and the eligibility criteria for salaried individuals, self-employed professionals and companies are:
|Age||18/21 years - 60/65 years|
|Credit score||750 or above with a good credit history|
|Minimum Net Income (Monthly)||
|Loan Amount||Up to ₹50 lacs depending on the credit profile|
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