Not everybody is in need of long-term finance! There are situations when you need funds for only a few days or a month maximum.
In such cases, people usually try to generate money from their friends and family than from a financing institution. It is because of all the myths related to financing services and their CIBIL score requirements.
However what most borrowers don’t know is that there are certain short term financing options available as well. These options are a type of instant personal loan, which can be taken to deal with any situation. Moreover, the interest rates on personal loans are also not as high as expected.
In case you are unaware of the short term financing options available in India, then here is a list of top three alternatives. Utilizing these personal loans will make sure that you do not have to borrow money from your friends and family ever again.
- Bridge loans
This particular financing service is also known as a swing loan or gap loan. It is a temporary financing alternative, which is used to accommodate your immediate financial needs. In other words, it is a bridge loan that reduces the gap between your current financial needs and potential long-term loans.
This type of personal loan or bridge loan is mostly used by real estate investors. They are the ones who are looking to arrange down payment for their latest property. This loan can be repaid as soon as a borrower’s home loan gets sanctioned. This is what makes it an ideal short term financing option. Although, the interest rate on this particular loan is more than a low interest rates personal loan.
- Personal loan
The most commonly used short term finance generating alternative in our country is a personal loan. A personal loan can be taken for a number of reasons. It may include paying your utility bills, credit card bills, medical expenses, and even going on a vacation. Most personal loans are unsecured, which means you would not have to put anything as collateral.
Apart from easy personal loan eligibility, you don’t have to worry about flexible instalments as well. This means you will end up paying a fixed monthly instalment for a defined period of time. However, borrowers need to thoroughly compare personal loan rates as they can be higher sometimes.
- Demand loans
For those borrowers who have some sort of investment to put as collateral, a demand loan can also be a great short term financing alternative. This type of personal loan or credit is usually offered by banks against investments like insurance policies or bonds. Since it is similar to an overdraft facility, a borrower can get up to 90% of the asset’s value.
Apart from this, the acquiring process of a demand loan is similar to a personal loan online application. It means you can generate a demand loan within no time on a lender’s website. Overall, it is a convenient method of generating funds for short term requirements of borrowers.
NBFCs provides you with quick and hassle-free methods to generate personal loans and more. Their list includes everything from a business loan, home loan, to EMI finance. They also have pre-approved online deals, which can make the borrowing process less time-consuming.