Short-term loans, like a small personal loan, provide you with a quick and efficient way to plug monetary deficits and meet goals such as going on vacation abroad. Over the years, one of the most popular short-term solutions has been the personal loan, with a growth of 26.9% in 2018 as per an RBI survey. Moreover, with lenders like Bajaj Finserv offering substantial personal loans on simple loan eligibility terms, these offerings have become all the more beneficial and accessible.
Read on to know more about the various short-term loans that you can avail to remedy any financial hiccups.
Personal loans
A personal loan is a collateral-free offering that you can use towards any purpose you deem fit. When you choose lenders such as Bajaj Finserv, you get access to ample finance, up to Rs.25 lakh. Further, you can better your loan eligibility prospects if you have a high CIBIL score, and this can help you secure a favourable personal loan interest rate too. The tenor for a personal loan generally goes up to 5 years.
Additionally, with Bajaj Finserv, you can avail the Flexi Loan facility. It enables you to borrow from your approved sanction as many times as you like, in portions, without producing multiple applications or paying any additional charges each time. Moreover, interest is applicable on the amount withdrawn only and not on the total loan amount. Also, you can part-prepay the loan.
Loan against credit card
An easy way to procure a short-term loan is through a credit card. If you own a credit card, then depending on your usage, credit limit, credit history and loan eligibility, several banks offer you a loan against your credit card. The interest rates on these are usually high, ranging between 12% and 25%, but the processing fee is low. Additionally, most lenders offer flexible repayment tenors spanning around 3 years. The catch is that funding can be limited as the sanction is linked to your credit limit.
Bridge loans
If you need quick access to cash for a short-term need, bridge loans are an option to consider. Also known as a swing loan, this solution is good as a last resort when you need immediate access to money. As the name suggests, it is mostly useful for bridging the gaps in your finances. For instance, if you are waiting for a business payment to come through and need urgent finance for the down payment for an apartment in the meanwhile, you can avail a bridge loan to do so. Typically, these loans are offered for a 1-year tenor.
While you may think that a bridge loan is a small personal loan, it is not. It is an asset-backed loan that offers financing even above Rs.75 lakh. The amount you can borrow is a percentage of the asset’s market value.
Demand loans
A number of banks and NBFCs offer demand loans, which you can obtain by pledging small savings schemes, such as a National Savings Certificate, or insurance policies as collateral. The loan amount is linked to the maturity amount of the instrument and most financial institutions give 70% to 90% of the value as a loan. The rate of interest too depends on the particulars of the asset. For instance, you may have to pay interest at a 1% higher rate than what the deposit offers you. These loans have a tenor that ranges from a week to a few months, however, repayment is subject to the discretion of the lender.
Having considered these 4 top short-term loans, pick the one that best meets your current requirements. If you’re on the lookout for a flexible offering that gives you a high loan amount at attractive interest and a convenient tenor, opt for a personal loan. Bajaj Finserv makes it easy to access one too. Apart from simple eligibility criteria and online application, it allows you to check your pre-approved offer. Whether you need a small personal loan or high-value financing, the pre-approved offer allows you to obtain instant approval and get financing on customised terms.