Small Ticket Size (STS) loan is a type of loan that is designed to provide small amounts of funds to individuals and businesses. These loans are typically extended for short tenures, usually up to 7.5 Lacs and are secured against a self-occupied residential or commercial property. They can be used to fund a variety of purposes, such as constructing or purchasing a house, expanding a business, or meeting personal financial needs like marriage in family or children’s higher education.

The end use of the loan is important to the lender, as it allows them to ensure that the funds are being used for a specific purpose and that the borrower has a plan in place to repay the loan.

STS loans are typically offered by non-banking financial companies (NBFCs) and other specialized lending institutions, which tend to have more flexible underwriting standards than traditional banks. This allows them to provide loans to borrowers who may not qualify for larger loans from traditional banks.

It’s worth noting that interest rates on STS loans may be higher than those for larger loans, as the lender is taking on more risk by lending smaller amounts. Also, it may require the borrower to provide more collateral to secure the loan.