Short Term Loan


Apply Now

Overview

A short term loan is a type of loan that is obtained to support a temporary personal or business capital need. As it is a type of credit, it involves a borrowed capital amount and interest that needs to be returned or paid back at a given due date, which is usually within a year from getting the loan.

A short term loan is a valuable option, especially for small businesses or start-ups that are not yet eligible for a credit line from a bank.

Short term loans are suitable not only for businesses but also for individuals who find themselves in a temporary, sudden financial problem.

Types of Short Term Loans

Short term loans come in various forms, as listed below:

1. Merchant cash advances

This type of short term loan is actually a cash advance but one that still operates like a loan. As such, the lender loans the amount needed by the borrower. The borrower makes the loan payments by allowing the lender to access the borrower's credit facility. Each time a purchase by a customer of the borrower is made, a certain percentage of the sale is taken by the lender.

2. Lines of credit

A line of credit is much like using a business credit card. A credit limit is set and the business is able to tap into the line of credit as needed. It makes monthly installment payments against whatever amount has been borrowed. Therefore, monthly payments due will vary in accordance with how much of the line of credit has been accessed. One advantage of lines of credit over business credit cards is that the former typically charges a lower Annual Percentage Rates (APRs).

3. Payday loans

Payday loans are emergency short term loans that are relatively easy to obtain. Even high street lenders offer them. The drawback is that the entire loan amount, plus interest, must be paid in one lump sum when the borrower's payday arrives. Repayments are typically done by the lender taking out the amount from the borrower's bank account, using the continuous payment authority.

4. Online or Installment loans

It is also relatively easy to get a short term loan where everything is done online - from application to approval. Within minutes from getting the loan approval, the money is wired to the borrower's bank account.

Features and Benefits of Short-Term Loans

What are the key features of Business Loans?

  • Short-term loans are usually disbursed quite quickly.
  • Short-term loans can be availed by salaried individuals, self-employed individuals, and businesses, based on the laid terms and conditions.
  • Applicants are allowed to submit the required documents through online channels, thus making the transaction completely paperless.
  • The EMI repayment plans are set taking into consideration the repayment capacity of each borrower.
  • Short-term loans are customisable since borrowers can opt for a loan amount of their choice for tenure as per their requirements, provided it doesn't exceed a tenure of 1 year.
  • Although the interest rate charged for short-term loans may be higher than that of regular personal loans, the overall amount that you will have to pay as the interest may be lower since the loan tenure is quite short.

Pros and Cons of Short Term Loans

Benefits

  • Quick funding times.
  • High chances of acceptance with low credit rating.
  • Limited paperwork is required for the application process
  • Quick processing of application

Drawbacks

  • One of the most expensive types of loan.
  • Weekly payments can be difficult to meet for many companies with inconsistent revenue streams.

Advantages of Short Term Loans

There are many advantages in taking short term loans, including:

1. Shorter time for incurring interest

As short term loans need to be paid off within about a year, there are lower total interest payments. Compared to long term loans that take many years to mature, interest paid on short term loans is significantly less.

2. Quick funding time

Short term loans are less risky compared to long term loans because of a shorter maturity date. As such, the time it takes for a lender underwriting to process the loan is shorter. Thus, the borrower can obtain the needed funds more quickly.

3. Easier to acquire

Short term loans are the lifesavers of smaller businesses or individuals who suffer from less than stellar credit scores. The requirements for such loans are generally easier to meet.

Benefits

  • The repayment amount can be auto-debited from your account. This ensures that the EMIs are repaid on a timely basis.
  • The lender offers loans even to individuals who do not have a credit history.
  • The lender offers speedy processing of the loan application.

There are a few popular short-term loans that are offered by lenders in the country. You can avail any one of these loans if you require short-term funds for personal or business-related needs. Given that these loans have a maximum tenure of 1 year, you should ensure that you have the required funds to repay the loan within this term.

Why get a short term loan from Finway Capital

Getting short term loan from peer to peer lending platform is hassle-free, simple and easy. Fast Loan Approval.

With the help of digital automation, we have made our loan approval process much faster compared to any bank. We are continuously improving to provide you instant loans. Apply now to give it a try.

Flexible Loan Interest Rate

We do not have rigid interest rates. Interest rates are linked to the borrower's credit score calculated through our internal credit rating process. A better LenDen score ensures a lesser rate of interest for the borrower.

Easy Loan Processing

Our user friendly and tech enabled platform ensures that getting your loan approved is simply a few clicks away. Do not go by our words, try our platform to fulfill your loan needs. Start applying for your loan now!

No Prepayment Charges

No additional charges if you want to close your loan earlier. We provide the flexibility of prepayment to our borrowers.

Eligibility & Documents

Eligibility Criteria for Short-Term Loans

Below is the general eligibility criteria that you will need to fulfill to get a short-term loan:

  • You must be a resident of India.
  • You must either be a salaried employee or a self-employed individual/business owner.
  • You should be over 18 years of age.
  • You should have a savings bank account.
  • You should earn an income of over Rs.15,000.
  • If you are a salaried employee, you should have a work experience of at least 2 years.
  • If you are a business owner, your business should be at least over 1 year.

Documents Required

The documents that you will need to submit when applying for a short-term loan are as follows:

  • PAN Card
  • Proof of Income: Salary slips for the most recent 3 months
  • Proof of Residence: Rental agreement, Passport, Landline bill, Post-paid mobile bill, Bank statement
  • Proof of Identity: Driver's license, Aadhaar, Voter ID, Passport
  • Proof of Age: Driver's license, PAN card, Passport
  • Bank statements for the last 6 months
  • Proof of Employment: Offer letter, Form 16, Relieving letter
  • Passport-size photographs

How to Apply for Short-Term Loans?

Finway allow prospective borrowers to apply for short-term loans through online channels. Listed below are the steps that you will need to follow to apply for a short-term loan in India:

  • Compare Loans: Before you apply for a loan, you should compare the various short-term loans that are available. Make sure to check the loan amount that is offered, the disbursal time, the interest rate charged for the loan, processing fee charged (if any), late payment fee, and the customer service channels available.
  • Check Your Eligibility: You will need to check the eligibility criteria laid by Finway Capital. Make sure that you meet the eligibility criteria before applying for the loan.
  • Fill the Online Application Form: You will need to fill up the online application form and submit it to Finway Capital. You may have to key in details like the loan duration, amount that you wish to borrow, your name and contact details, etc., in the application form. The required documents will also have to be uploaded and submitted online.
  • Await Finway Capital's Approval: Once you submit the application form and the required documents, Finway Capital will verify and either approve or reject your loan application.
  • Receive Funds: If your loan application is approved, you will receive the approved funds into your bank account.

Short-Term Loans - FAQs

Close Button
Close Button

Share your Feedback