Top 5 Types of Loans You Should Know to Fund Your Short-Term Requirements

Need for instant money accrues at any point of time in life. You should ensure that you have sufficient cash in hand to meet out your unexpected or planned expenditures. What if, in case you face any shortage of cash? Still, in that case, you can look for short-term loans that can quickly satisfy your immediate financial needs. However, short-term loans typically come with high rates of interest. So, it’s better to assess your repayment viability before going for such loans.

There is typically the most common type of short-term loans that you may like to opt for in case you need to repay your credit card bills, fund for a vacation or fund towards medical bills. 

These top 5 types of short-term loans have been discussed here:

1. Bridge Loans

These are Short-Term Loans that put you ahead while you are facing a shortage of cash.  The Bridge Loans are secured form of financing that means these loans are provided against property or collateral.

These loans come to your rescue when you know that you will get your income very shortly, but by that time you are in urgent need of funds. These loans are common or you might have witnessed someone obtaining this loan from a real estate background. The Bridge Loans are very fruitful when it comes to a business deal closure but in that case, you require to pay money for which you can obtain from bridge loans.

 These loans are obtained for an amount that is worth of 70-80% of the property that you extend as a form of security to the lender. These loans are secured loan and the interest rate is not that high in contrast to other short term unsecured loans.

 

2. Personal Loan

Personal Loans are short term loans that are disbursed to fulfill your personal needs. The personal needs can be anything and which depends on the use, there are various types of Personal Loans such as Personal Loan for Marriage, Child’s Education, for Home Renovation or Travel or for other personal needs.

The interest rate is high on these loans as there is no collateral security required for this loan. Depending on the conditions that have been prescribed by a lender, the amount is predetermined to lend you. Your CIBIL score, income level and repayment capacity will be assessed by the lender before disbursing a Personal Loan.  You can avail instant personal loan disbursal from modern lenders such as:

MoneyTap Personal Loan

MoneyTap is an app-based Instant Personal Loan provider that enables you to borrow starting from Rs. 3000 that goes upto Rs. 5 lakhs per as your credit limit. MoneyTap is the first Indian app-based personal loan service provider that operates in partnership with banks.

 With MoneyTap view, you can examine your credit limit as determined by the partner bank (as per your profile, income, credit history and other factors) and the amount of personal loan you have obtained and used over a period. Also, you have to pay interest only on the amount you mobilize. 

At the withdrawal time, you have the flexibility of choosing your repayment terms which can fall between 2 months and 3 years. The repayment tenure you choose will determine your EMIs.

The interest rate offered to you by MoneyTap is the same as personal loan market rates with zero collateral or security.  The interest rate offered to by the lender would be as low as 1.25% per month based on the partner bank and your credit profile.

FlexSalary Personal Loan

FlexSalary Personal loan is offered to salaried employees for meeting their instant cash requirements in case of an unexpected financial emergency. This loan is flexible and easy to apply for as it needs only a one-time application and a one-time approval. The main benefit of the FlexSalary Personal loan is to avail the loans within a few minutes of application. This loan comes with a convenience subject to the specified needs of monthly salaried earning individuals.

Features

• To avail FlexSalary Personal loan, apply on the website of Flex Salary by creating an account.
• You may obtain a loan up to a maximum of Rs. 2 lakhs.
• You do not need to provide any collateral security to obtain this loan.
• You are required to select the loan tenure subject to your repayment capacity.
• Your application can be immediately approved upon document submission and its verification.
• Your loan will be disbursed to your bank account within 24 hours of loan approval.
• You are not liable to pay fixed equated monthly instalments for this loan.
• You will obtain the loan at competitive interest rates.

 

Eligibility

• FlexSalary Personal loan is offered to Indians only.
• To qualify for this loan, you need to be above 21 years of age.
• You must produce a valid identity proof.
• Your net monthly salary must be above Rs.8,000.
• You must have an operative bank account.
• You must have a minimum working experience of three months.

 

Kreditbee Personal Loan

Kreditbee Personal Loan offers instant personal loans to both salaried employees and self-employed professionals. The personal loans extended starts from Rs. 1,000 through the online portal. It is an app-based service provider which hosts various non-banking financial companies(NBFCs) in its app for providing personal loan to its customers.

The repayment tenures of personal loans go upto 15 months subject to the loan personal loan amount availed. The interest rate is offered in the range of  0% to 29.95% p.a.

Kreditbee Personal Loan Details

Interest Rate : 0% to 29.95%

Processing Fee: Rs 100 onwards

Tenure: Upto 15 months

Loan Amount : Minumum Rs.1,000

3.  Trade Credit

This loan is identical to our regular Credit Card. You can obtain money often for a maximum of 30 days, without any interest being applicable on the amount obtained. The borrowers are provided a specified limit on the amount that can be utilised and repaid.  You will be charged with the interest only for the amount that you use and the interest rate is not applicable on the maximum limit that is available as a credit for trading purposes. There are alternatives on this Credit Loan, and it’s upto your discretion whether you are keen to repay the full amount within the specified period of 30 days or can choose to convert into Equated Monthly Instalments (EMI).

 

4. Bank Overdraft

This loan is available on your current account to utilize as per your needs. There is an Overdraft limit, within which you can withdraw the additional amount in excess to your available current balance. Overdraft on loan is widely useful at times when you need money urgently, but there isn’t sufficient balance in your account to withdraw. The interest rate (that is often less than that on the Credit Cards) is levied on the amount that has been withdrawn from the Overdraft Limit. But you need to be careful while choosing the overdraft loan as it could incur additional charges and other fees that you would be required to pay in full.

 

5. Demand Loans

Banks and other financial institutions offer demand loans as per your short-term financial needs. These are primarily secured loans; the securities are often in the form of products such as insurance policies and bonds. The loan you can obtain is approximately 70-90% of the value of the security. Similar to an overdraft facility, you have the option to use only a portion of the total demand loan sanctioned. The interest rate is predetermined subject to the part of the loan you use and not on the full amount sanctioned.