Have you ever felt a sudden need for money in the recent past? If yes, how did you manage to meet the requirement? Well, if you ever face a similar situation in the near future, you can, among other things, take out a small amount of personal loan from a bank or a non-banking financial corporation (NBFC).
TO personal loan It is an unsecured loan offered by a financial institution to borrowers who urgently need money in the blink of an eye. It could be needed for anything from a personal emergency to purchasing a luxury item for a loved one or a business trip. vacation either organizing a wedding.
A personal loan can be repaid over a short term, say one to 18 months, or over a long period, say five years. Here we give more details about short-term personal loans, which are normally repaid between 1 and 18 months. So, a short-term personal loan, as the name suggests, is a variant of a personal loan that is repaid in a short period of time.
If you plan to take out a short-term personal loan, you need to be careful about a number of things. Here we provide detailed information on the key questions regarding short-term personal loans:
What is a short-term personal loan?
A short-term personal loan is an unsecured loan that is typically repaid within 1 to 18 months. is used for instant financial needs and is usually faster to obtain than traditional long-term loans.
What is the purpose of the loans?
First of all, make sure that the purpose of the loan is such that it falls under the category of personal loan. For example, if you need money to buy a car, you can also apply for a car loan. Otherwise, you can simply apply for a personal loan.
Should I use a credit card or apply for a personal loan?
If the amount is too small and you have to use the money to buy from a merchant where you could use a credit card – then you could use the card instead of taking out a personal loan.
For example, if you need $2 lakh to buy a laptop, instead of taking a personal loan for six months, you could use your credit card and make the payment in equal installments spread over the next six months. However, you should check with your bank beforehand.
What is the interest rate charged?
Another key factor that matters is the interest rate that the bank charges. Since different banks, NBFCs and fintech platforms It charges different interest rates, you can choose the one that offers you the best deal.
What are the eligibility requirements?
Eligibility to get a short-term personal loan includes regular income, PAN, bank statement, Form 26AS and payslips for the last three months.
Is there any alternative available?
Another question you should ask yourself before taking out a short-term personal loan is whether you have other alternatives available. For example, could you borrow money from a friend without paying any interest?
Additionally, if you have an outstanding personal loan, you can simply apply for a complementary personal loan at the same interest rate.
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