There are many reasons for oneto look for short-term loans. You might need quick cash for improving the way your house looks or meet the expenses of the wedding of your daughter or for some urgent traveling needs for medical purposes. Taking a short-term loan in such situations offers an easy way to fund the expenses. The banks and other financial institutes offer different types of short-term loans, and one should choose the loan that best suits the immediate needs. Thus, it is really important to assess the repayment capacity before taking out a loan. The following are three types of short-term loans that you can avail.
- Personal loans
The personal loans are the most common kind of short-term loans. People usually take these loans for the repayment of credit card bills, funding a vacation, or paying medical bills. The money from such a loan reaches you really fast. There are personal loans where one can get instant cash loan in as low as 24 hours in India.Visit this website to know more about how to get instant cash loans.
These are unsecured loans, and one must pay it back in fixed monthly installments within two to five years, depending on the loan amount and loan provider. The interest rates are usually high for these types of loans, but there are several private lenders that offer personal loans at really low interest rates. A person opting for personal loans needs to show his income proof as the lenders attempt to ensure that the amount is not more than forty percent of the monthly income.
- Bridge loans
Bridge loans are called so because they aim to bridge the gap between long-term loans and the immediate cash needs. These are also known by various other names like gap financing or swing loans. You can also get instant cash loan through bridge loans.
These loans are generally used by the real estate buyers when they are looking to arrange payment for the property that they wish to purchase with a home loan. The interest rates for such loans are higher than home loans as it is also a kind of unsecured loan. The use of bridge loans is the most common in real estate markets when looking to close a property deal.
- Demand loans
Many financial organizations and banks offer demand loans for short-term financial requirements. These are secured loans that can help you avail instant cash loan, in some cases. The securities are submitted in the form of bonds and insurance policies. The loan usually has a value of 70-90% of the security.
It is similar to an overdraft facility. The borrower can only utilize a part of the total demand loan that has been sanctioned. Banks generally do not ask for repayment before the term unless the value of the pending amount is more than the value of the security submitted. Banks can also ask for payment before the term if the security is slated to mature, but it does not cover the entire amount.
A borrower must compare the rates of different lenders for different loans before coming to a decision. It is also important for the borrower to take stock of his financial condition so as to not land in debt.