Introduction to Short-Term Loans

Short-term loans in 2025 provide quick financial solutions for urgent needs, offering flexibility and fast disbursal. Loanpao connects you with lenders for options like payday loans, personal loans, and invoice financing to address immediate cash flow gaps.

Types of Short-Term Loans

Payday Loans

Small loans up to ₹50,000 at 15–30% p.a., repaid within 1–3 months, ideal for emergencies.

Short-Term Personal Loans

Unsecured loans up to ₹5 lakh at 12–20% p.a., with tenures of 6–18 months for personal expenses.

Invoice Financing

Loans up to ₹10 lakh at 10–15% p.a., using unpaid invoices as collateral, repaid within 3–12 months.

Overdraft Facilities

Credit lines up to ₹15 lakh at 10–14% p.a., offering flexible withdrawals and repayments.

Mudra Yojana (Shishu)

Government-backed micro-loans up to ₹50,000 at 10–12% p.a., with tenures up to 12 months.

Comparison of Short-Term Loan Options

Key short-term loan options in 2025:

Loan Type Loan Amount Interest Rate Tenure Key Feature
Payday Loans Up to ₹50,000 15–30% p.a. 1–3 months Quick disbursal, no collateral
Short-Term Personal Loans Up to ₹5 lakh 12–20% p.a. 6–18 months Flexible use, unsecured
Invoice Financing Up to ₹10 lakh 10–15% p.a. 3–12 months Uses invoices as collateral
Overdraft Facilities Up to ₹15 lakh 10–14% p.a. Flexible Withdraw as needed
Mudra Yojana (Shishu) Up to ₹50,000 10–12% p.a. Up to 12 months Government-backed, low rates

Note: Rates, tenures, and eligibility vary by lender and applicant profile.

Benefits of Short-Term Loans

These loans provide:

  • Rapid disbursal, often within 24–48 hours.
  • Flexible repayment terms, from 1–18 months.
  • No collateral for payday loans and personal loans.
  • Support for urgent needs like emergencies or cash flow gaps.
  • Government-backed options like Mudra for affordability.

Tips for Applying for Short-Term Loans

Maximize approval and manage repayments:

  • Provide Income Proof: Submit bank statements or invoices for eligibility.
  • Check Credit Score: Aim for 650+ for unsecured loans.
  • Compare Lenders: Use Loanpao to find low-rate options.
  • Plan Repayments: Use EMI calculators to ensure affordability.
  • Avoid Overborrowing: Borrow only what you need to minimize interest costs.

Frequently Asked Questions

Short-term loans are quick financing options with tenures of 1–18 months, designed for urgent needs.

Payday and personal loans are unsecured, while invoice financing may require invoices as collateral.

Many short-term loans, like payday loans, are disbursed within 24–48 hours.

Yes, Mudra Yojana (Shishu) offers micro-loans up to ₹50,000 for short-term needs.

Loanpao connects you with verified lenders and provides tools like EMI calculators for planning.