1. Short tenure loan seekers:
   There are loan seekers with good profiles who might need a small amount for a short period. There is nearly no viable alternative if you wish to avail of a Rs. 40,000 loan with the facility to close in 1 or 2 months.

2. Borrowers with high DBR:
   There are some urgent needs that suddenly crop up without notice needing a finance option. Banks and NBFCs have strict debt burden norms and might not serve a case which is adequately leveraged. So it is difficult to procure credit when faced with an emergency like a medical need or some other obligation.

3. Company unlisted:
   The way personal loans work is based on the classification of companies based on repute by banks/NBFCs. So employees working for bigger, more reputed companies get loans at lower rates and better conditions. People working in smaller companies might be ignored and left with no options.

4. Credit novices:
   This factor combined with the earlier point is a reason for a lot of loan requests getting declined by banks and NBFCs. Many of these institutions do not advance loans to individuals with no credit history or rating. So while an individual might have the ability and intention to pay, he/she might still not get a loan.

5. Low credit rating:
   There are instances where mistakes are made by individuals in the past which accumulates into a low credit rating. These individuals might be able and willing to pay back a loan now but are generally side-lined due to their past mistakes.

• 1.Flexible end-use

Short-term loans are multi-purpose loans. This means that they can be utilized for organizing a wedding, taking a family vacation, renovating your home, paying for education, buying products such as electronics or furniture, establishing and expanding business or paying for a sudden medical emergency.

2.No collateral needed

Short-Term Loans are generally unsecured. This means that you do not need to provide any collateral as security in exchange for the loan amount. This is very beneficial for customers who do not have any collateral to pledge as security.

3.Minimal documentation

The paperwork and documentation that is needed for a short-term loan is very minimal. This makes the entire process fast and easy for the customer as the documentation can be completed very conveniently with ease.

4.Quick disbursal

Short-term loan disbursals are relatively quicker than most of the other long-term loans as you do not need to provide documentation for the purpose of the loan amount and for any assets as none are pledged generally.

5.Loan amount
Short-term loans are opted by individuals to meet short-term needs such as paying a medical bill, a wedding expense to meet or an unplanned trip to fund. The loan amount for a short-term loan begins at just Rs.5,000 and can extend up to Rs.3,00,000. The customer can pick the loan amount based on his/her needs.

6.Tenure

Short-term loans as the name suggests are taken for a very short duration. Short-term loans are easier to get approved and can be repaid very fast thereby ridding the individual of the financial burden sooner. The tenures range from 1 month to 12 months (1 year).

1. Bridge Loan:
A bridge loan is a short-term type of financing that is used to meet the current obligations before securing permanent financing. It offers immediate cash flow when funding is required but is not yet available. However, this type of loan comes at a comparatively high rate of interest and must be backed by some security or form of collateral like business inventory or real estate property. This type of short-term loan can be accessed by both individuals and companies to meet certain obligations. As the name indicates a bridge loan helps to tide you over till the time you get another loan, usually of a bigger amount, approved.
2. Merchant Finance Loan:
It is technically a cash advance but one that still operates as a short-term loan. Merchant finance loan is an alternative to the lengthy loan approval process and strict credit eligibility required for a traditional term loan. Under this, a borrower makes the loan payments by allowing the lender to access the credit facility.
3. Payday Loans:
This is an emergency type of short-term loan that is relatively easy to obtain. Even the prominent lenders offer them. The loan repayment is typically done by the lender by taking out the amount from the borrower’s bank account while using the continuous payment authority. The drawback of Payday Loans is that the entire loan amount (including interest) needs to be paid in one lump sum when the borrower’s payday arrives.
4. Invoice Financing:
Invoice financing is done by using business account receivable (invoices that are, as yet, unpaid by the customers). The lender gives the money and charges the interest based on the number of weeks that invoices remain outstanding. And when an invoice gets cleared, the lender interrupts the payment of the invoice and takes the charged interest on the loan before returning to the borrower what is due to the business.

There are a number of lenders in India who 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 to a particular lender, you should compare the various short-term loans that are available in the Indian market. 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:
  Once you choose a particular lender, you will need to check the eligibility criteria of the lender. 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 the lender. You may have to key in detail like the loan duration, the 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 Lender’s Approval:
  Once you submit the application form and the required documents, the lender 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.

1. Loan Amount
   The main difference between long-term and short term loans is the amount lent. Needless to say, the higher the loan amount, the longer it will take to repay it, in most cases. The lower amount of short term loans makes repayments easier and without getting in debt.
2. Interest Rates
   High-interest rates are charged on short term loans mainly to compensate for their short repayment period. Typically, short term loans are provided collateral-free making it riskier for lenders in case of non-payment of loans, which is again covered by charging high-interest rates on short term loans.
3. Ease in Loan Approval Procedures
   The main reason why borrowers apply for short term loans like a personal loan is because of the immediate liquidity offered by them. And therefore, the process involved in approving these loans by the lenders is quick and easy. Minimal documentation is required for short term loans.Long term loans are approved only when all the eligibility criteria are met and the credit-worthiness of the borrowers is thoroughly assessed. In the case of secured long term business loans, the market value of these assets is assessed. Many times, short term funds are approved within 24 hours which is almost impossible in case of long-term loans.
4. Duration
   The repayment tenor for short term loans is usually between 1 to 5 years. Whereas the tenor of long -term loans may vary between 10 to 20 years. The longer repayment time allows a business to spread its mortgage over a longer period of time.
5. Collaterals
   A Long term loan is provided for a higher amount with longer tenor resulting in the repayment going on for longer periods. The lenders, therefore, request a collateral i.e. security for these types of loans. In case of any default from the borrower, the lender can recover their outstanding dues from the sale of such collateral. On the other hand, short term loans are usually unsecured and don’t require collaterals. However, in certain cases, they may need some indirect form of collateral – such as invoice discounting, account receivable funding, overdraft facility secured against fixed deposits, and so on.
6. Need for Loans
   A Short term loan is usually utilized for the company’s working capital requirements or operational expenses. Businesses essentially use long term funds to finance an asset purchase or an expansion or growth strategy. The output from these assets or expansion strategies is earned over a period of time, thus allowing repayment of loans in a structured and phased manner.

• Use of loan funds:
  Use term loans for business expansion, cash flow financing capital expenditure, and purchase of fixed assets

• Tenure:
  Enjoy tenure of up to five years

• Repayment:
  Schedule repayments to match your cash flow

• Ways to bank:
  Enjoy services at all branch location

• Short-term products:
  Avail short-term financing options to suit your requirements

• Low-cost financing:
  Benefit from customized low-cost credit options on term loans

Ans.
Loan amounts start at just Rs.5,000 and can extend up to Rs.3 lakhs for short-term loans.

Ans.
You can repay your Short-Term Loan’s EMI payments using UPI or Netbanking with NEFT or IMPS using the virtual account that has been specially allocated. In some cases, the auto-debit form (NACH) allows the lender to deduct EMIs directly from your bank account.