What is short-term loan? Important information to know

by Janne Abir Marketing
One of the forms of loan that is being chosen by many people is short-term loans. However, not everyone understands about this form of loan. Therefore, in the following article, Jeff Vietnam will share about the loan form that is particularly interested in today.

1. What is short-term loan?

A form of borrowing between the borrower and the lender based on a transaction of assets. Accordingly, the borrower will be able to borrow a loan as agreed in the contract for a short-term loan period, usually less than 12 months. The borrower is responsible for paying both principal and interest to the lender. The purpose of short-term loans is usually to offset capital in business or for personal consumption.

In addition, there are now also medium-term loans with a loan period of 12 months to 5 years and a long-term loan from 5 years or more, even lasting up to 40 years.

2. What are the conditions for short-term loans at banks? Profile like?

If you want to borrow short-term money at a bank, borrowers need to prepare the following documents:

  • Loan application form and a plan to use specific loan amount
  • ID papers
  • Types of collateral
  • Legal documents (Business registration certificate, tax code)
Only when the borrower prepares all the documents and meets the following conditions will a bank provide short-term loans:

  • Having civil act capacity
  • Eligible for health and age
  • Have good financial capacity, can repay the loan within the specified time
  • Having a feasible and legal plan to use loan capital, with the ability to bring profits
  • Have collateral of the equivalent of a loan

3. Interest rate for short-term loans at banks

Most banks in Vietnam apply loan interest rates from 6-11% / year for short-term loans. There are also some special cases that will enjoy lower interest rates, only 4-5% / year.

The specific interest rate offered by banks depends on a number of factors:

  • The borrower's financial situation
  • Needs and purposes of borrowing money
  • Loan limit and term
  • Rate of inflation and price slippage over time

4. Should I borrow short-term money?

Short-term loans are one way to deal with a financial predicament quickly. Currently, there are many people choosing this form of loan. However, when borrowing, you should note:

The lending rates of joint stock banks are usually lower than that of state-owned banks, but the penalty fee for closing loan contracts before maturity is very high.
Banks in large, developed provinces often have lower interest rates than banks in rural areas
If you borrow a small amount, the interest rate must be higher than a large loan
Try to pay off your debt on time to avoid falling into standard debt, even bad debt.

5. Non-mortgage short-term loan service

In addition to banks, borrowers can also choose to borrow short-term money at Jeff Vietnam. This is a company that specializes in helping to find good loans with low interest rates and borrowers do not need to mortgage, prove financial. Loan procedures are also very simple, disbursement quickly. To better understand this service, you can refer to:

Above is some information about short-term loans. Hope the above shares will help you better understand this form of loan.

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About Janne Abir Freshman   Marketing

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Joined APSense since, October 28th, 2020, From Phoenix, United States.

Created on Dec 18th 2020 15:22. Viewed 205 times.


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