What is a short-term personal loan?
- The short-term personal loan is gaining popularity among the individuals who are salaried professionals but cannot approach the banks due to the requirement of very fewer amounts of loans.
- Banks only lend a reasonable amount so that they can earn interest on the amount they lend to the applicants.
- The short-term personal loan is altogether a new concept under which a very low amount of loan is given to the people who do not have any credit history and cannot approach banks due to very less requirement of money.
- Forgiving out the short term personal loan there is a big digital platform which includes apps like
- Shubh Loan, and
- Early salary etc. the rising demand for a small-term personal loan has led to the creation of these apps.
Such lenders provide instant loans with various attractive repayment schemes. These app-based lending companies like CASHe have been registered as Non-Banking Financial Corporations (NBFCs) and are also promoters of digital India.
Advantages of short term personal loans
The advantages of such short-term personal loan are
Quick disbursal of the money
Whereas, the approval and disbursal of the personal loan from a bank would take at least 7 business days.
- This loan system does not require much paperwork.
- 90 percent of the process takes place through the mobile application.
- Only 10 percent of the paperwork part includes post-dated cheques and physical signatures.
- Does not require any credit history.
- Acts as an instant solution for cash.
There are various types of personal loans. The people who do not have any credit history and those who are having very fewer savings can go for this type of loan. In fact, this short-term personal loan can also help to develop a good credit score if people availing loans make regular and timely payments. These types of loans can be beneficial for a person who has new joined a job just after college. Usually, a person can borrow money amounting to five thousand to One lacs as short- term personal loan.