Cash crunches can happen anytime and come to anyone at any point. There could be immediate fund requirements for bearing the medical expenses,or there could be a shortage of funds for your child’s wedding. Adding some additional money to your cash flow is the need of the time. Thankfully, some lenders provide us options for funding our short-term needs. But remember, these are loans only for short-term requirements. They could prove to be costly.
Let us learn about the types of loan ideal for short-term goals:
These loans can prove to be helpful when it comes to short-term needs. They are wholly unsecured and hence, do not require backup as collateral or security. This loan is multi-purpose, which means you can use them as you want. From using them for home renovation to higher education, anything is fine. Considering it is unsecured, the interest rates are higher for them. Before applying for the loan, use the personal loan EMI calculator for planning your finances better.
The other reason why personal loans are handy during emergencies is owing to their quick disbursal and approval. Most lenders process them within hours.
Personal line of credit
These are short-term bank loans that work as business credit card. You receive a credit limit from which you can withdraw as much as you need and whenever needed. The money withdrawn gets repaid through EMIs as any other loan. The interest gets charged only on the funds you withdraw and not on the absolute limit. But this short-term funding option is the best and always deals in cash.
Additionally, you can access lower APRs with a personal line of credit than a credit card. Though it does not come with plenty of reward points each time you swipe as you work with credit cards, it still has many benefits. The personal line of credit is worth sacrificing the glamourous perks which a personal credit card promises.
These loans are also ideal for short-term goals. These are for commercial real estate purposes for quickly closing a property deal or something similar. Most of the lenders offer these loans. They are ideal for the time when you know you will have some income coming. The bridge loans provide funds for fulfilling your needs when you are out of it. You can repay them when you get the money.
They are primarily secure,and security is the property papers or bonds you are to sell. The loan you generally receive is 70% to 90% security value. The interest rates are not too high and decide based on the loan portion used and not on the entire amount sanctioned.
You can always apply for these as offline or online loans. Before approaching any, compare them in the market and check if it fits all the parameters.