Short Term Personal Loans 2022

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Short Term Personal Loans 2022 Highlights

Loans are classified as short term loan when the tenure of repayment of the principal amount is less than a year. You can get a short term loan easily from Afinoz. Same-day approval. No physical documentation required. Attractive interest rates. Apply now.


A short-term loan can be defined as a loan taken for a short time like for a year or less. This type of loan is usually extended by the lenders generally for the repayment tenure from 1 year to 2 years. These loans usually have greater flexibility for the loan repayment within the given tenure. While most of the banks offer loans for the tenure of over 1 year, there are very fewer banks and NBFCs which are now experimenting with short duration of loans. Short term loans are mostly unsecured, which means you don’t have to pledge any collateral as security to avail the Personal loan. This type of loan usually availed to obtain support for a temporary personal, especially for the small businesses or start-ups that are not yet eligible for a credit from the bank.


Features, Benefits and Demerits of Short-Term Loans

Features of Short-Term Loans

When you think of acquiring a loan, you probably envision obtaining a mortgage for up to 30 years. However, you can also avail the benefit of short-term loans. This type of loan doesn’t have a high principal to repay the loan, which means you will be required to pay a few installments before reaching the loan maturity date. Several other characteristics of the short-term loan make it attractive: 

  • Quick Application Process:- With a short-term loan, you are not required to deal with a long-drawn-out application process. Most of the short-term loan lenders require proof of identity, like a driver's license, passport card or book. After that, you will need to prove that you have some income to pay back the loan amount. This may require your recent paychecks or your previous year's taxes in case you are self-employed.
  • Collateral-free :- Short-term loans are usually unsecured, which means they don't require any collateral or security for the approval. You don't have to own a home with equity, have a large bank account, or even a credit score in the excellent range. And this among the major reasons for a short-term loan is a good choice for the young adult who is just starting or any individual who has enough to make ends meet but doesn't currently have a lot to put toward the savings.
  • Quick access to cash:- Unlike the long-term loans that require a lengthy loan application and approval process before the disbursement of the loan amount, short-term loans are often completed within a few hours. That makes the short-term loans an excellent choice for the emergencies that can't wait, like a leaky roof repair or a tooth extraction. The short-term loan gives you the money to take care of the problem immediately and then make the payments later to pay it back. You also have the option to pay it back in one lump-sum when you get the next paycheck. 
  • Improves the Credit Score:-Because short-term loans are also reported to the three major credit reporting agencies, individuals can use them to help improve their credit score. Someone can take out a small personal loan and set the money aside to make the payments each month. As long as the payments are made on time and the loan is successfully paid off, points will be added to the credit score. You can do this a few times to demonstrate a history of making timely payments. 
  • Wide Range of Uses:-Almost every type of short-term gives you the freedom of the fund's usage on anything you'd like. Unlike a mortgage loan that can only be used to pay the home and an auto loan that can only be used to pay for your vehicle. But with a short-term loan, you can do like anything like you may wish to stick with essentials, like a new heating unit for the home or a fee for your child's college education. Alternatively, you may require money to go on a much-needed family vacation instead. Other uses for the money like furniture purchases, wedding expenses, and holiday shopping.
  • Money deposited directly in the account:- With a short-term loan, you will have various options when it comes to how you would like to receive the funds. Like you can request to have the money in the cash or deposited directly in the savings account. If you opt for the bank account, the money may take a day or two to be available for the withdrawal, but you'll then be able to write a check or use your debit card to cover the expense for which you have availed the short-term loan.

Benefits of Short-Term Loans

  • Fast Loan Approval:- A short-term loan is suitable for those people who need urgent cash requirements. A short-term loan application can be approved within a matter of a few hours although it may vary based on the lender. In some cases, you can have access to the short-term loan funds within the same day or the following working days.
  • Low Rate of Interest :- Usually, the longer you owe the lender, the higher the rate of interest you are required to pay. However, with a short-term loan, you need to pay back everything within a shorter period which means you pay relatively lower interest rates. 
  • It Can Help You to Improve the Credit Rating:- Unlike the long-term loans, you have a luxury choice of opting for a short-term loan that best suited the personal circumstances. For instance, if you have a bad credit repayment history, then you can take a short-term loan for a few months to help you improve the credit score. As long as you repay the loan on time, you will see the credit rating improve.
  • Offers Flexible repayment tenure:- A short-term loan comes with convenience and flexibility. You can apply for a short-term loan whenever you need extra funds since most of the lenders facilitate the online loan application. This will also reduce the stress of owing the lender money for a longer time and watching the interest accrue which can turn into emotional and psychological torture.

Demerits of Short-Term Loans

  • High-Cost Loans:- Generally, short-term loans attract a high rate of interest which leads to the high monthly payment. Since you are financing the principal debt over a shorter time of span, you may end up paying a big amount of money every month compared to what you will be paying if you are going for a long-term loan.
  • Can harm Credit Score:- Although a short-term loan can be used for building up the credit score, the consequences can be dire if you fail to repay the loan on time. Your new debt to income ratio (DTI) plus the high cost of the new loans will drastically bring down the credit score.
  • Can Make You Fall into a Cycle of Borrowing:- As short-term loans are flexible, convenience and easy availability can end up making you a seasonal borrower. You may find yourself hooked towards the borrowing whenever you require extra funds, it can be risky not good. This can lead you to end up spending more than you can afford or waste a lot of money.

When is it Suitable to take a Short-Term Loan?

There are various situations in which availing a short-term loan can be best suited to you. Though it may vary from one’s requirement to another. Here are the few particular situations when short term loan can be your savior:

  • Unemployment:- Suffering through a time of unemployment is not something that you would wish on anyone. As it is both, financially and emotionally stressful. May be at certain points, you find it difficult to make up ends meet. In this type of situation, a short-term loan can be very helpful for several reasons. First, there are lenders in the market those offers short-term loan to the unemployed applicants. Second, it gets you with quick money need, without delay. Third, it allows you to continue to the lifestyle you had before you lost the job. 
  • Borrowers with high DBR:- Everyone has those urgent needs which suddenly crop up without any notice needing a finance option. Banks and NBFCs have a strict debt burden norm and might not serve a case which is adequately leveraged. So, it is difficult to procure a credit when faced with an emergency like a medical need or some other obligation. In this scenario, short term loans can be the best-suited option to you.
  • Loans for Debt Consolidation:- Short term loans can be availed for paying off another debt, it could be a debt from another source like a credit card. In this case, it can make sense to take out a short-term loan, especially if the rate of interest on the loan is less than what you owe on the other debt. 
  • Avoiding Embarrassment:- At the time of financial needs borrowing money from friends and family can be safer than availing a loan but owing from them money could cause friction. That’s why acquiring a short-term loan can be a better choice than borrowing money from the known one.
  • Short tenure loan seekers:- If you are having a good profile and you might need a small amount for a short period. There is nearly no viable alternative than a short-term loan if you wish to avail of an Rs. 30,000 loans with the facility to close in 1 or 2 months.
  • For Personal Expenses:- You can avail of a short-term loan to meet the personal expense like paying off bills, holiday, festival expenses, etc. For example, you can get the money at the time of Diwali and can pay back what you owe in the new year after you have made some money.
  •  Loans for a Medical Emergency:- A medical emergency is always a big expense. It could range from two thousand, up to a couple of hundred thousand. It all depends on the type of medical need or treatment that you need. Medical issues are certainly one of the big reasons people avail short term loans. Taking health insurance can be expensive compared to acquiring a short-term loan.

How Long Are Short Term Loans?

The tenure of a short-term loan usually of 1 month to 12 months. However, the loan repayment tenure varies based on various factors like the lender, income, and others.

 Types of Short-Term Loans

  • 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. 
  • 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. 
  • 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.
  • 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 take the charged interest on the loan before returning to the borrower what is due to the business.

 Short Term Loans Eligibility Criteria and EMI calculation

Short Term Loans Eligibility Criteria 

The eligibility criteria to avail a short-term loan can vary from one lender to another. Having said that, here are the general eligibility criteria to fit into to acquire a short-term loan: 

  • You must have Indian citizenship. 
  • You must either be a salaried employee or a self-employed individual or a business owner. 
  • Your age should be over 18 years. 
  • You should have a savings bank account. 
  • Your monthly income should be Rs.15,000. 
  • If you are a salaried employee, you should have at least 2 years of working experience.  
  • If you have a business, then it should be profitable for at least over 1 year.

Short Term Loans  EMI Calculation

EMI is the abbreviation of Equated Monthly Installment. It is the amount that a loan borrower has to pay throughout the loan tenure. In simple terms, EMI is a part of the due amount i.e. the principal and the interest accrued payable each month. The EMI calculation is quite a tough task to do especially to make the calculations speedily with pen and paper. But the EMI calculator allows you to accomplish the EMI calculation without even stepping out of your home and within a few seconds. And you do not even require to recheck the calculation if you make the use of the EMI calculator. Now days almost every lender has an online EMI calculator which is free of cost.

To calculate the EMI on short term loans, here are the basic steps. Although the steps may vary based on the lender:

  • Step 1: Visit the official website of the lender.
  • Step 2: Select the option for ‘EMI Calculator
  • Step 3: Fill the details like loan amount, rate of interest and repayment tenure and within few second the result will be displayed on the screen.

It takes less than a minute to check the EMI amount against the personal loan to be taken.

Fees and charges Short-Term Loans

The fees on the short-term loan may differ based on the lender's discretion and the applicant’s profile. Following is the generic fees mentioned charged on the short-term loans: 


Processing Fees


Rs. 500

Early Salary

Rs. 399

Indiabulls Dhani

2.5 %

Money View

2.0 %

Compare Best Short-Term Loans in 2021

The definition of term best short-term loans varies based on an individual need, for example, maybe for A the best loan is the one where he is getting a high amount of loan and for B the best loan is that where he is getting a low-interest loan. Below are some of the lenders who have been preferred by the people although all the factors mentioned in the table may vary based on an applicant profile.


Loan Amount

Interest Rate 

Loan Tenure


Rs. 5000 to Rs. 3 Lakhs

1.75% to 3.25%

15 days to 12 months


Rs. 8000 to Rs. 2 Lakhs

2.5% (per month)

7 days to 43 days

Bank of Baroda

Rs. 10 Lakhs

Varies based on various factor

Up to 12 months

Funds Tiger

Rs. 50,000 to Rs. 20 Lakhs

Up to 20%

3 months to 12 months


Rs. 1 Lakhs to Rs. 5 Lakhs

18% to 36%

Up to 5 years

Documents needed for Short-Term Loans

The list of documents required to submit for availing a short-term loan are as follows:

  • PAN Card 
  • Proof of Income: Salary slips for the most recent 3 months 
  • Proof of Residence: Rental agreement, Passport, Landline bill, Post-paid mobile bill, Bank statement 
  • Proof of Identity: Driver’s license, Aadhaar, Voter ID, Passport 
  • Proof of Age: Driver’s license, PAN card, Passport 
  • Bank statements for the last 6 months 
  • Proof of Employment: Offer letter, Form 16, Relieving letter 
  • Passport-size photographs 

How to apply for a short-term loan?

Various lenders offer online loan applications for short-term loans. Following are the basic steps that you will need to follow to apply for a short-term loan: 

  • Compare available offers: Before you apply for a loan to a particular lender, you should always compare the various short-term loans offer available to you. Make sure to check the offered loan amount, the loan disbursal time, the rate of interest charged on the loan, and other applicable charges.
  • Check the Eligibility: Once you select the short-term loan lender, you will need to check the eligibility criteria for the same. Make sure that you meet the eligibility criteria before applying for the loan. 
  • Fill the Application Form: Now fill up the online application form and submit it to the lender. You may require basic details like the name, contact details, loan tenure, required loan amount, etc. The required documents will also have to be upload. 
  • Lender’s Approval: Once you submit the application form and the required documents, the lender will verify and inform you whether the loan application is approved or rejected.  
  • Loan Disbursement: If your loan application is approved, then you will receive the approved funds directly into your bank account.

Repayment options for Short-Term Loans

The repayment options for short-term loans are flexible and varied. Among the other benefits, the flexible repayment options provided by the short-term loans hold better attractions for the borrowers. They enable you to pay off the loans with the utmost flexibility. So, what are such repayment options?

Listed below are the repayment options available to pay off the short-term loans: 

  1. EMIs – EMIs, or Equated Monthly Instalments, are the most popular and preferred mode of repayment which is available for paying off short-term loans. Under this option, the principal amount of the loan along with the rate of interest is included in one installment which is payable every monthly. The EMI option of the loan repayment also has other flexible variants like: 
  • The Step-Up EMI Plan – Under this plan, the EMIs keep on increasing every month. The effect is that the loan is repaid faster and the interest outgo is reduced. This plan of the repayment is suitable for those that expect a favorable income soon as that would enable them to pay off the surged EMIs and reduce their loan burden. 
  • The Step-Down EMI Plan – Under this plan, EMIs reduce as the loan tenure progresses. The borrower pays a major part of the loan principal at the onset and then the instalments to reduce over a period. 
  • Accelerated EMIs – Under this option, borrowers are offered with complete flexibility in their installment payments. If they have a surge in their income, they can make an accelerated instalment payment. 
  • Normal EMIs – This is the regular plan where a fixed amount of money is payable over a fixed loan tenure. 
  • Balloon repayments – Though almost similar to the step-up plan, balloon repayments are a little different from the step-up plan. In the starting years, the EMIs are low. However, as the years pass the installment amounts become substantially high. 
  1.  Bullet Repayment – Under this repayment option, only the interest portion of the loan is to be paid monthly. 

  2. Invoice-based repayments – This is a new short-term loan repayment option that offers loans against the value of the borrower’s invoices. 

How to get a Short-Term Loan with Afinoz?

You can easily apply for a short-term loan with Afinoz. It is a financial platform who has tie-ups with various lenders that provide short term loans purely based on the customer persona and KYC documents. So, if you are facing any difficulty in availing a short-term loan then go with Afinoz. Here are a few simple steps for applying for an easy loan:

  • Step 1: Visit the official site of
  • Step 2: Click on the “Apply” button.
  • Step 3: Choose the type of loan you want to avail of.
  • Step 4: Enter the basic details like required loan amount, type of employment, income, working tenure, existing monthly installments (if any), mail id and others.

After entering all these details, a message will be displayed on the screen regarding your eligibility. And if you’ll be standing on the short-term loan eligibility criteria then the Afinoz team will contact you.

➤ FAQs

Ques. Can short-term loans can be availed with a low credit rating?

This will depend on the lender. That said, few lenders may offer short-term loans to individuals who have a low credit score, as well.

Ques. Will I need some guarantor to get my short-term loan approved?

This will differ from lender to lender. However, most likely, you will not need a guarantor for the approval of the loan application.

Ques. Do I need to pledge collateral or security for my short-term loan application?

No, short-term loans are usually collateral-free loans. Certain lenders, however, may offer you a low rate of interest if you provide collateral or security at the time of taking the loan.

Ques. How long can I take to repay a short-term loan?

A short-term loan usually comes with a tenure of 1 year. The repayment period will depend on the lender and the tenure that you choose.

Ques. Can I extend my repayment due date?

You will need to repay the due amount within the provided date by your lender. Failure to do so may attract a penalty. Certain lenders, however, do offer a grace period for the repayment of the EMI.