Cash crunches are common and can come to anyone at any point of time. There can be immediate money requirement to bear some medical expense or it can be some shortage of money to fund your child’s wedding. Adding some extra money to your monthly cash flow can also need to time. Thankfully we have banks and NBFCs which provide us with many options to fund our short -term requirements. But remember these loans are for short duration and hence can be a bit costly than the other loans.
Top 3 Types of Loans You can Get to Fund Your Short-Term Requirements
- Personal Loans
Personal loans can prove to be a great help to you when it comes to funding your short term requirements. These loans are totally unsecured and hence do not require any back up in form of collateral or security. These loans are multi-purpose too which means you can use them the way you want. From using it for home renovation to higher education of your child anything is fine. The rates charged for these loans are a bit higher than other conventional loans but who cares it fulfils all you need that too on time. Another important thing which makes the personal loan your best option to avail it in times of emergency is its fast approval and disbursal. With most of the banks and NBFC’s, it is processed in just a few hours.
Features and Benefits of a Personal Loans
- No collateral required
- Easily available
- Fast processing
- Speedy approval and quick disbursal
- Minimal documentation
- Nominal interest rate
- Flexible tenure period
- Personal Line of Credit
Your next option to fulfil your short term financial requirement is- a personal line of credit.
A personal line of credit is a short-term loan option which functions much similar to a business credit card—you’ll get a credit limit from which you can withdraw as much needed and whenever needed. The money withdrawn can be repaid through EMIs same as any other loan. The interest is charged only on the money you withdraw not on the full limit.
However, this short-term funding option is one of the best and always deals in cash. In addition to this, you ’ll be able to access lower APRs with a personal line of credit than with a credit card. Though it doesn’t come with lots of reward point’s every time you swipe as you get with your credit cards, but still, it has many benefits apart from that.
A personal line of credit is often worth sacrificing the glamorous perks that a personal credit card promises.
Features and Benefits of a Personal Line of Credit
- Widely available with most of the banks and NBFCs
- Provides your flexibility in borrowing
- Low-interest rate
- Can be used for any reason
- Interest is not charged on the maximum limit
- One can borrow whenever required
- Bridge Loans
Bridge loans are often used to fulfil your short term requirements. It can be for commercial real estate purposes to make a quick close on a property deal or any similar kind of. As of now, there are 31 lenders, including banks like HDFC and SBI, that offer such loans. Bridge loans are best for the time when you know that you will have a certain income in the near future. A bridge loan provides you money to fulfil your needs when you are out of funds and then you can easily repay it when you get your money.
These loans are mostly secure loans; the securities are usually in the form of property which you are about to sell or bonds which you are about to sell. The loan you get is typically 70-90% of the value of the security. The interest rate is not high and is decided based on the part of the loan used by the borrower and not on the full amount sanctioned.
Features and Benefits of Bridge Loans
- Affordable interest rate
- Gives you access to a huge loan amount can be opted.
- Repayment period is flexible
- It has the potential to fulfil all your urgent financial requirements.
Remember there are many options to fund your short term requirements but it you should know which one suits you the best. And before you go for any particular one compare it with all the lenders available in the markets and check whether it suits all your parameters or not. Borrow as much required and as much you can repay!