Do you need help to stay on top of your finances to keep your business running? Especially during the initial business years, entrepreneurs find securing a traditional business loan challenging.
This is primarily because lending institutions demand a reliable cash flow, a good business facility, and a long-drawn business plan. What can ambitious business owners do when they have no access to funds? They can apply for a personal loan for business owners!
Keep reading to know all about a personal loan for business owners, the interest rates, eligibility, etc.
A personal loan for a business owner is, as the name suggests, a personal loan extended to self-employed individuals or entrepreneurs. This loan is approved based on the business owner’s creditworthiness and not on their business’ cash flow.
They can also be called loans for freelancers who wish to gather funds to market their services to the right people. These personal loans enable small business owners to grow their businesses without worrying about cash flow issues.
A personal loan for a business owner would make sense under the following scenarios –
Loans for freelancers or personal loans for businesses are sanctioned for applicants who meet specific eligibility requirements. These requirements may differ among lending institutions. However, some commonalities remain, similar to a regular personal loan.
The most common eligibility requirements include the following –
You can use an easy-to-use online tool like the personal loan eligibility calculator to determine the maximum principal amount you are eligible to borrow.
One good thing about personal loans for business owners is that no collateral or security is needed for loan approval. However, being an unsecured loan means you will be charged slightly higher interest rates when compared to traditional business loans.
Generally, the interest rates increase proportionately to the principal amount borrowed.
In urgent need of funds? Fi Money offers instant loan approvals with the amount transferred to your Fi account. All you need is a good credit score, and a pre-approved loan will be available. The best part is that the entire process is 100% paperless, with the loans extended at competitive interest rates. Don’t worry! The whole process is transparent, and you can access all the details. With the help of our licensed partner, we assign loan amounts up to a maximum of INR 5 lakhs. You can also set up automatic in-app payments to avoid default charges on personal loans for freelancers.
No, the traditional business and personal loans for business owners are not the same. The latter is a multipurpose loan, whereas the former is solely offered for business purposes. Also, a business loan is often a secured loan where the company’s creditworthiness is considered.
The personal loan for a business owner is an unsecured loan where the business owner’s personal credit score is considered.
Yes, a foreign national can apply for a personal loan in India. However, the same is done based on non-repatriation. Meaning the loan must be repaid in India only. The repayment must be made to the NRI’s NRO account, with no overseas payments permissible.
