Short term loans are provided under two categories: One as a Short Term Overdraft (usually against work orders), made available for a maximum period of 12 months; and one a short term term loan.
For overdrafts, the rate of interest is fixed at 13% per annum, and no interest rebates are allowed (if any rebate is provided by the bank to other products); the loan must be repaid back with the initially agreed period of 12 months or less. If it needs extension under special circumstances, the interest rate continues to remain at 13%.
For the second category, (short term term loan), the payment schedule is kept as ‘bullet” (meaning the entire loan outstanding is payable on the maturity/ expiry date). The interest applicable is the fixed rate for the applicable loan type/ sector. Floating rate is not applicable for this type of loans, even if extended.
Please visit the branch nearest to you to know more.