With the augment of digitization and the technology revolution, India sees a rise in people taking up the role of an entrepreneur. To breathe life into their entrepreneur dreams, people need to look at different options for financing. But as the debt financing market has witnessed a rapid metamorphosis, many opt to fund their dreams with a business loan. However, they overlook the option of taking on a personal loan to finance their business. The loans are just as useful and just as prompt an option as business loans. Here’s how this loan can help you fulfil your dream of being an entrepreneur:
- The flexibility offered by personal loans
Personal loans can be used for personal reasons. There are no contingencies or strings attached to how the funds are used. From paying for a wedding, house renovations to going on a holiday, these loans can be used for any personal reason. And what is more personal than having a dream to run your own business? At the start of putting up your business, it can be challenging to secure a business loan, with the eligibility criteria being strict and the process being cumbersome. Getting this loan enables you to get the funding you require when you require it.
- The speedy application process
Unlike business loans, the approval and disbursal process of personal loans are extremely prompt. The application process itself is hassle free and usually comes with favourable and flexible repayment tenures.
- Competitive personal loan interest rates
Unlike business loans, these loans offer competitive interest rates. Use the personal loan EMI calculator to estimate the interest rate that works for you.
- No need to put up a collateral
Personal loans, by nature, are unsecured loans. This implies that the borrower doesn’t need to put up their assets as collateral. Instead, banks and financial institutions grant loans based on the borrower’s credit score. The banks study the credit worthiness of the borrower based on their past payment behaviour and current cash flows, before disbursing funds at their discretion. There is no need for a co-signee or a guarantor either, making the entire process of securing this loan a lot easier.
- Improves your credit score
As the personal loan is given to you based on your credit worthiness, the repayment of the loan also contributes to your credit score. It strengthens your score as you make the payments on time. These timely payments build a strong record for you as an entrepreneur, reflecting on your overall credit score.
- Simple eligibility criteria
Unlike other types of business loans, the personal loan does not have strict and stringent eligibility criteria in place. Whether you are salaried or self-employed, you are eligible to avail of this type of loan. The loans are disbursed with minimum documentation and sometimes are disbursed digitally.
When embarking on a new chapter, finding the right type of financing is the most challenging aspect. While these loans may not cover setting up the entire operation, it provides the assistance you require in a cash crunch. They help you bridge the gap between today’s goals and your future goals, allowing you to plan your next steps without worrying about the financing aspect of getting there. The flexibility, the competitiveness of personal loan interest rates, the digitalization of the process and the less cumbersome application process, make it simpler for personal loans to fulfil your dreams of not just being an entrepreneur, but of being a successful one.