How short-term personal loans help you during financial emergencies

Let’s meet Anjali, a young marketing professional living in Mumbai. A sudden medical emergency drained her savings, and she needed funds quickly to cover additional expenses. This happens to the best of us. A crisis strikes, requiring immediate financial assistance. Or perhaps you’re looking to undertake some big-ticket expenses, such as renovating your home. These are just a few examples of short-term financial needs that can arise unexpectedly.

While looking for solutions, Anjali discovers the option of taking a short-term loan. Let’s explore the benefits of these loans and the factors to consider before applying for one.

What is a short-term personal loan?

A short-term personal loan is a multipurpose loan available for your personal as well as business requirements. The loan does not need any collateral security, which makes it an attractive option for those who do not wish to pledge any assets. It is one of the major reasons why it is the best solution for your short-term financial needs.

A short-term personal loan addresses your emergency requirements, such as medical emergencies, home renovations, or unexpected expenses.

Advantages of a short-term personal loan

There are many benefits of personal loans, especially when considering a short-term option. These include –

• Quick approval and disbursement

One of the primary benefits of personal loans for short-term needs is the fast approval process. Lenders understand that these loans are often taken out during financial emergencies, so they strive to offer a streamlined application process.

• No collateral required

Since most short-term loans are unsecured, you don’t need to provide any collateral. This makes it accessible to a wider range of borrowers, particularly those who do not own assets such as property or vehicles. It also reduces your risk, as you don’t have to worry about losing an asset if you are unable to repay the loan on time.

• Flexibility in usage

One of the significant benefits of personal loans is the freedom to use the funds for any purpose. Whether it’s for medical emergencies, home repairs, or paying off existing debt, there are no restrictions on how the loan amount can be utilised. This flexibility allows you to manage your finances according to their specific needs.

• Attractive interest rates

Short-term loans have competitive interest rates, which will keep your monthly repayments manageable. Moreover, these rates are fixed, which means you know exactly how much you will need to repay over the loan tenure. This stability helps in better financial planning, as there are no surprises in the form of fluctuating interest rates.

• Improves credit score

Timely repayment of a short-term personal loan can positively affect your credit score. A higher credit score can make it easier to obtain loans in the future and may also help secure better interest rates.

• Minimal documentation

The application process for short-term loans often requires minimal documentation, making it convenient for those who may not have access to or time for extensive paperwork.

• Easy eligibility criteria

Short-term loans have simple eligibility criteria. Some lenders also offer loans if you have a low credit score. With more than two dozen banks and NBFCs in the fray, it is easy to get them sanctioned. You can compare various loan offers and choose a lender with the lowest interest rates.

Factors to consider before taking a short-term personal loan
 

While the benefits of short-term personal loans are undeniable, here are some factors to keep in mind –

• Interest rates and fees

Always check the interest rate being offered. While some lenders provide competitive rates, others may have higher rates, especially for short-term loans. Additionally, there may be processing fees and other charges, so it’s crucial to factor in the total cost of the loan.

• Repayment terms

A short-term personal loan will have a shorter repayment window, which can mean higher monthly instalments. Make sure you are comfortable with the repayment terms and can manage the payments alongside your other financial obligations.

• Credit score requirements

Although these short-term loans are accessible to many, having a good credit score can significantly affect the interest rate you are offered. You may be charged a higher rate or have limited loan options if your credit score is low.

• Lender reputation

Not all lenders are the same. Before choosing a lender, research their reputation, customer service, and reviews from other borrowers. This will help you avoid any issues during the loan tenure.

Introducing IDFC FIRST Bank Personal Loan
 

If you are considering applying for a short-term personal loan, IDFC FIRST Bank offers an attractive option. You can digitally apply for funds up to ₹1 crore with minimal documentation and quick approval.

IDFC FIRST Bank also offers competitive interest rates starting from 10.99% p.a. and flexible repayment options for up to 12 to 84 months. These reasons make it the best choice for a personal loan that addresses short-term needs.

Wondering what is the eligibility criteria? You must be between 23 and 60 years of age. And that’s it!

To apply for a personal loan online, keep the following documents ready –

• Valid KYC
• Bank statement
• Net banking or debit card details to set up an e-mandate

Once you have all the documents prepared, follow these simple steps to get your IDFC FIRST Bank Personal Loan:

1. Log in to the IDFC FIRST Bank Mobile Banking App
2. Enter your details for an eligibility check and get instant online approval
3. Upload your documents and complete the loan verification process
4. The bank verifies your personal information based on the documents submitted
5. Upon successful verification, the loan is credited to your bank account

The bottom line
 

Whether you are facing an emergency, planning a trip, or needing some extra cash to tide over an unexpected situation, a short-term personal loan can be a quick and effective solution. The benefits of personal loans make them a preferred choice for many.

Apply for an IDFC FIRST Bank Personal Loan now and handle your financial challenges with ease, just like Anjali!