Short-term personal loans help you out during some unforeseen emergency, and they cater to different purposes in our lives, such as health-related needs, sudden repairs, etc. Today’s busy lifestyle sometimes keeps people away from even money, so these loans offer access to some fast funds and thereby give you room to undertake your pressing expenditures without endangering your stability in financial matters. Unlike long-term loans, short-term personal loans are usually repaid within months. Actually, such loans are paid for 12 to 36 months. Because they are fast and flexible, these loans are considered attractive since they allow the borrower to cover his or her immediate financial needs.
The first major benefit of getting a short-term personal loan online is that it takes a short time to be processed and approved. Often, in less than hours, a loan is granted. There are also various lenders offering instant, short-term personal loans. Such platforms ensure the release of funds almost instantly after approval. The application process for an instant, short-term personal loan online can be applied to make it even easier. Whether you are in an emergency situation or want to consolidate debt, these loans offer a stress-free and convenient solution.
In this blog, we will look at the benefits, characteristics, and eligibility criteria for small short-term personal loans so that you can grasp how they can help fulfill your financial requirements.
Features of Short-Term Personal Loans
A short-term personal loan is an unsecured loan meant to fulfil pressing financial needs. Unlike long-term loans that spread for years, these are repaid in the short term, between 12 to 36 months. They are good for those who require rapid access to funds and a debt pay-off within a shorter period. Because they are non-collateral short-term loans, they become readily available to most types of borrowers who may not possess assets to pledge as securities.
These loans are usually taken for medical bills, home improvement, or debt consolidation. The ease and quick availability of an instant, short-term personal loan make them a favourite among people who need to pay for immediate expenses without having to go through a long process of approval.
What Are the Features of Short-Term Personal Loans?
With such short-term personal loans, a key understanding is what features characterize the loans. Here are some things to keep in mind:
Loan Amount: It depends on the lender for the loan amount, but a small short-term personal loan can be between some thousand and some lakhs according to the policies of the lender and your eligibility.
Repayment Terms: Repayment terms of short-term online personal loans are typically more lenient as compared to long-term ones. Loans are normally made in monthly installments so that these can easily fit into your budget.
Approval Speed: The other benefit of instant short-term personal loans is how quickly the approval is made. Several lenders offer instant personal loans for short-term needs, with a couple of hours for approval and disbursement within one to two days.
Collateral-Free: As these loans are unsecured, no collateral is required from borrowers, and it’s easy to get the loans for those who don’t have valuable collateral.
Pros & Cons of Short-Term Personal Loans
Pros:
Speedy Access to Cash: The main benefit of a short-term personal loan online is fast processing and approval followed by a release. You get the cash within one or two days of the lender’s processing.
Small Installment Repayments: Since the short duration of a short-term personal loan, the interest over the entire term of such a loan would be lower, which makes short-term loans cheaper than the respective long-term loans.
Flexible Usage: You can use the funds from a short-term personal loan for any purpose, whether it’s medical bills, home repairs, or debt consolidation. There are no restrictions on the loan’s usage.
Fixed Repayment: With small short-term personal loans, the monthly repayment amount is fixed, helping you plan your budget effectively without worrying about fluctuating amounts.
Cons:
Higher Interest Rates: Although short-term personal loans are too convenient, short-term loans typically have much higher interest rates than long-term loans because a short-period loan requires a shorter period for re-payment.
Credit Score: Failure to punctually repay your short-term personal loan may drag down your credit score, and borrowing for other loans becomes difficult in the near future.
Short Repayment Period: You save on interest since this is a short loan. Still, the monthly payments could increase significantly, thus risking placing pressure on your purse in case you do not anticipate it.
Drawbacks of Short-Term Personal Loans
However, even with such benefits, short-term personal loans have their disadvantages. Most people would say that one of the major disadvantages is a higher interest rate than what is offered for long-term loans. The interest charged on a short-term personal loan is higher to ensure that the lender is reimbursed within the shortest possible time.
Moreover, small short-term personal loans online usually have very stringent repayment terms. A missed payment can damage your credit score, and some lenders charge high late fees. Since these loans are unsecured, the lender has no collateral to seize in case of default, but they may resort to legal measures to recover the funds.
Eligibility Criteria for Short-Term Personal Loans
Before applying for a short-term personal loan, one must meet the eligibility criteria of the lender. Eligibility criteria may vary from lender to lender, but some common requirements are:
Credit Score: Most lenders require good credit scores from their borrowers. However, some lenders do offer small short-term personal loans to those with bad credit.
Income: You are guaranteed the loan since you would repay it. The lenders are required to get hold of pay stubs and tax returns, showing they have a consistent income stream.
Age: Generally, most lenders do consider having the applicant’s age from 21 up to less than 60.
Employment Status: Usually, lenders request their applicants to be in a full-time employment position or one who is an employer but with a source of constant income.
It has thus fulfilled your requirements to get an instant, short-term personal loan that might help you meet those urgent financial needs.
How to Choose the Right Short-Term Loan?
To select the best short-term loan, follow these key factors when you are out searching for a short-term personal loan:
Amount of loan: Take the amount which is perfect for the need. Make the loan payment terms feasible and manageable within your financial conditions.
Interest rates: The interest rate that different lenders are giving. The less interest is going to cost you comparatively less over a long-run loan.
Repayment flexibility: Compare the available repayment terms and ensure they fall within your budget and financial goals. Some lenders may offer you flexible terms that can change depending on your situation.
Lender reputation: This can be done by doing some research on the lender, reading customer reviews, and even checking their ratings on third-party sites. This prevents you from hidden fees or perhaps poor customer service.
Conclusion
Short-term personal loans can manage sudden expenditures and amalgamate debt. Loans’ ease with quick approval and distribution makes them an attractive product when a person requires liquidity at any time of urgent expenditure. Although the benefits from small, short-term personal loans can be invaluable, they must be compared by weighing the pros and cons of making an application.
If you need a small personal loan for a short period, we would need to check a few factors to see that you will qualify and know what you get in exchange for your small loan from Stashfin. Here, we try to deliver instant, short-term personal loans that can be availed quickly when you desperately need cash. Stashfin is making repayment terms easy and flexible for clients while offering low interest rates by applying online for a short-term personal loan. Apply today.