Short term loans are such types of loans which are given for acquiring loan, constructing building or setting up and in buying of any equipment or commercial vehicles. Several financial institutions in India are providing options for short-term loans. Usually, these term loans last for a couple of years. However, some term loans are for long-term repayments. However, before opting for term loans, here are a few things you need to know and remember about these term loans.
There are five different types of term loans available in the market. Here we will describe them below. Also, the term loan interest rates vary in all different types of loans. Hang tight with us to know the different types of term loans.
It is maybe the most affordable source of obtaining some interest-free funds. You can avail of this trade credit when any lending institution gives you the time to pay for the purchase without incurring the traditional costs. The trade credit is extended for thirty days. Well, you can also ask for a longer tenor that might fit well in your plan.
These loans are going to help you by tidying you over till you get another loan. This loan will interpret the case of transactions relating to your property. In other words, when you want to buy a new house but don’t have enough funds, and you haven’t sold your old house yet, these bridge loans can help you. Because, in such cases, most people wait for the time until their old property sells off, and in the meantime, the price of the new property goes higher. If you don’t want that to happen, you should try opting for these bridge loans.
The demand loans can help you get rid of any urgent financial situation. You should pledge your insurance policies and the other savings instruments like the NSCs. The percentage of the maturity value on different instruments is going to determine the extent of the eligible loan.
This is another facility of a term loan. With the overdraft facility at your disposal, you are going to withdraw money despite your account not having a sufficient amount to cover the withdrawals. This will help you to get money within the overdraft limit. Like every other loan, it also has interest rates. However, that is sometimes lower than credit cards.
You can avail of personal loans to meet different needs like renovation, wedding, travel costs, or higher education. You can use these personal loans to meet any medical emergencies too.
Now that you are aware of different types of term loans, here are a few important things you should know about these loans.
- These loans are usually provided to acquire land, buy or set machinery, equipment, construct a building, or get a commercial vehicle.
- The loans are medium-term most of the time, and not many people lend this money for long-term tenure.
- The bank or the lending institution will evaluate your project to get the technical and economic viability before sanctioning the loan.
- These interest rates will depend on different factors like the riskiness of the project and the amount of your loan.
- Banks will offer rupee and foreign currencies for these loans.
These are almost everything you need to know about the best term loan available out there.
You can also opt for an unsecured business loan from leading NBFCs and get up to Rs. 45 lakh with minimal documents. You can apply for a business loan with Bajaj Finserv, one of the leading lenders and get high-value sanction without any collateral.