5 types of Short-term Loans in India

Short-term loans in India are typically offered for 6 to 18 months, making them ideal for meeting urgent financial needs without pledging any collateral. Unlike traditional loans, these short-term personal loans no credit check India provide quick access to funds, even for individuals with minimal credit history. With a simplified application process, borrowers can obtain money for immediate requirements such as medical expenses, travel, or emergency bills. Understanding the different sources of short-term loans helps you choose the right option for your financial situation and ensures timely repayment without hassle.

1. Trade credit

This is possibly one of the most affordable sources of obtaining interest-free funds. You can avail of trade credit when a lender gives you the time to pay for a purchase without incurring any additional cost. Trade credit is usually extended for 30 days.

However, you can consider asking for a longer tenor that would easily fit into your plan.

A flexible repayment tenor will allow you to leverage the additional time and funds to finance other initiatives.

2. Bridge loans

A bridge loan will help to tide you over until you get another loan, usually of a bigger value, approved. In India, such a loan assumes importance in case of transactions relating to the property. For example, if you want to buy a new house but don’t have sufficient funds, the old one hasn’t been sold off yet. You might want to wait for the funds to come through once you get a potential buyer for the old property, but this will have its own downsides, including the price of the new property shooting up.

During this waiting time, you can avail of a bridge loan that offers two-pronged benefits. One, it helps you with the funds to buy the property while giving you ample time to wait and another, getting a good deal on the old one.

3. Demand loans

A demand loan can help you meet any urgent financial obligation. You can pledge your insurance policies and other savings instruments such as NSCs in lieu of the loan. A certain percentage of the maturity value on such savings instruments will determine the extent to which you will be eligible to borrow as the loan amount.

4. Bank overdraft

This is a facility that you can avail of on your current account. With an overdraft facility at your disposal, you will be able to withdraw money despite your account not having sufficient cash to cover such withdrawals. Essentially, it helps you to borrow money within a sanctioned overdraft limit.

Like any other loan, an interest rate (often lower than that on credit cards) is levied on the outstanding overdraft balance. However, be wary of certain additional costs attached to such a facility, including fees per withdrawal.

Additional read: How to apply for an overdraft

5. Personal loans

You can take a personal loan to meet various needs like home renovation, wedding, higher education or travel costs. You could also use a personal loan to meet a medical emergency or consolidate your existing one into one.

Many lenders offer a personal loan based on your income level, employment and credit history, and perceived repayment capacity. Unlike a home or car loan, a personal loan isn’t a secured one. This means that the lender will not have anything to auction if you default on repaying the loan amount. What differentiates a personal loan from all these aforementioned loans is that it gives you a substantial loan amount with a flexible tenor to facilitate repayment.

What is a short-term loan?

A short-term loan is a type of financing typically offered for a period ranging from a few months to 1–2 years. Unlike long-term loans, these are often unsecured, meaning you don’t need to pledge collateral. They are ideal for addressing immediate financial needs, such as medical expenses, urgent travel, or small business requirements. With faster approval and disbursal, short-term loans provide quick access to funds, helping you manage cash flow without long-term financial commitments.

How can a short-term loan help you?

Short-term loans can be a practical solution for managing sudden financial emergencies or temporary cash shortages. They provide instant liquidity for expenses like medical bills, travel, or urgent home repairs. Additionally, timely repayment of such loans can improve your credit history and demonstrate financial responsibility. By offering flexibility and quick access to funds, a short-term loan can help maintain financial stability while addressing immediate monetary needs efficiently.

Why choose Bajaj Finance as your personal loan partner?

Bajaj Finserv offers India’s personal loans up to Rs. 55 lakh, which can be repaid in easy EMIs spread from 12 months to 96 months. These loans offer quick approval with money credited to your bank account in 24 hours*. You can also avail of the loan in a Flexi format and make unlimited withdrawals and prepayments. Here you don’t have to pay personal loan interest rate on the entire sanctioned loan amount, but only the portion of the loan you use. Check your monthly instalments using personal loan EMI calculator.

*Terms and conditions apply.

You can also use the EMI Calculator available on the website to find your exact EMI, tenure, and interest rate before you opt for a personal loan.

With pre-approved offers from Bajaj Finance, availing of finance is a hassle-free affair. All you need to do is provide some basic details to know your exclusive pre-approved loan offers and avail of instant funding without the effort of queuing for lengthy applications or submitting multiple documents.