Short Term Loans: What You Need to Know Before You Apply?

Now that you understand what a short term loan is, you must wonder what purposes you may resolve with it.

A short term loan is your best option when you need instant monetary assistance. You may obtain a quick cash loan instantly and repay it in a short period. While it conveniently manages your immediate cash requirements, there are things you should be aware of. 

What is a Short Term Loan?

As its name suggests, a short term loan is a financial help you may take out for a shorter period. With the emergence of new technologies and online facilities, getting a loan has become much more manageable. Lending institutions offer them on an urgent basis. You may borrow them to resolve immediate cash shortfalls. Since the terms and conditions vary between lenders, you must understand them carefully before applying.
These loans are collateral-free with most lending companies. You don't need to pledge any asset as security to obtain the required funding. You only need to fulfil simple eligibility criteria and present some basic documents.

Reasons to Borrow a Short Term Loan

Now that you understand what a short term loan is, you must wonder what purposes you may resolve with it. Here are a few reasons why you may consider borrowing these loans:

• Handle an Emergency: Short-term loans are beneficial when you need cash in an emergency and fall short on it.
• Consolidate High-Interest Debt: If you have multiple high-interest loans with varying EMIs and due dates, consolidate them with a short-term Personal Loan to save money and become debt-free sooner.
• Travel: A Personal Loan for travel may help you cover various travel-related expenses, such as flight tickets, hotel accommodation, sightseeing, visas, and local transport.
• Education: A Personal Loan can be an excellent funding option for covering education expenses such as fees, lodging, books, a laptop, and other essential study materials.
• Wedding: Do you need funds to plan a wedding event or cover a last-minute expense? A Personal Loan with no end-use restrictions can give you much-needed financial freedom.
• Medical Treatment: Health insurance does not cover many treatments and procedures. With a Personal Loan, you can opt for any medical procedure without limitations.

Pros and Cons of Short Term Loans

Although a short term loan is an essential financial tool, you must know its pros and cons before applying. Here’s an overview:

Pros:

• Quick Cash When Required: These loans fulfil your immediate financial requirements thanks to their immediate approval and quick disbursal.
• Repayment Flexibility: Lending institutions offer flexible repayment terms on these loans. You may opt for a tenure with budget-friendly EMIs that do not stress your finances.
• No Collateral Requirement: These are unsecured loans that do not need any collateral, security, or guarantor.
• Build Credit Score: Since these loans have affordable EMIs that you may repay on time, you can improve your credit score with them.
• Easy Application: Reputable lending apps support complete digital application procedures. You may complete them from the comfort of your home. The entire procedure does not require any office visits or paperwork.

Choosing the Right Loan Plan

These are the most important things to consider before applying for a short term loan:

• Interest Rate: Compare loan plans from various lenders based on their interest rates and benefits.
• Hidden Charges: Choose a loan plan with transparent and reasonable extra charges, such as prepayment charges, EMI bounce charges, processing fees, etc.
• Repayment Tenure: The EMI amount depends on your loan amount, interest rate, and repayment tenure. The lender should give you enough time to repay the loan in easy EMIs.
• Collateral Requirement: Many lenders demand an asset as collateral for security. If you default, the lender seizes that asset to recoup their loss. If you don't have an asset or want to put it at risk, seek an unsecured loan without security.

You may use it to fulfil emergency requirements or cover casual expenses. If you are looking for a small Personal Loan, you can consider Hero FinCorp loan app that provides quick cash loans online. It needs no collateral and requires minimal documentation.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.