Points to consider when you avail a personal loan to start a business!

personal loan to start a business

personal loan to start a business

Every business needs a business plan. Majority of commercial applications require more documents as a proof of identity. If you are finding seamless and quick loan disbursal for your business, then look no further.

Buddy Loan is one of the biggest loan aggregators in India that disburses loans at lower interest rates starting at 11.99% p.a. They also have customised EMI options that help you work your credit score with ease.

Applying for a business loan gives you numerous benefits like tax returns, interest rate reduction based on credit score, faster approval rate based on the reputation of the company.

Read more: 5 Primary Factors Your Lenders Consider For Your Loan Application 

Availing a business loan:

Any businessman or an entrepreneur can be accommodated with lower interest rates starting at 11.99% p.a. based on their credit history. A business loan is an unsecured loan, wherein you do not need to pledge any asset or provide any collateral.

There are certain factors the borrower will have to look for will applying for a business loan. Using the EMI calculator, pre-plan the wedding expenses by roughly estimating the expenses. The EMI scale is present in every loan site to help you calculate your monthly EMIs, total sum of interest rate and more.

By doing this, you will auto check your credit score and thus it is easier to maintain that too. Research about the loan offers carefully and the EMIs that the financial institution can provide.

Points to consider when to avail a personal loan to start a business

Eligibility criteria  

A business loan is nothing but a personal loan which is availed during the financial shortcomings for business development or launching new sectors of business. There are many competitive interest rates from which you will have to pick the appropriate ones.

A borrower should bear in mind that he/she should be min 25 years – 60 years old to avail the loan. It is more helpful if the borrower is either salaried or self-employed with a minimum salary of Rs. 20,000/-. The approval rate and interest rate depend on the borrowers’ credit history.

The applicant can avail instant business loans up to Rs. 15 lakhs for an application. The borrower can discuss further with the lender for best EMI options in between the loan tenure of 3 months to 5 years.

Read more: 5 Primary Factors Your Lenders Consider For Your Loan Application 

EMI & Tenure

Buddy Loan disburses business loans for a loan tenure of 3 months to 5 years. The better option is that you could tell your lender if there are certain concerns and EMI payment can customise such that it only enhances your credit score.

PAN card is mandatory to get a business loan!

YES! Any financial transaction executed in India between an investor and a borrower, be it an individual looking for a personal loan, a business owner looking for a business loan, a student looking for an educational loan, or a potential house owner looking for a home loan, is based on his/her credit history and credit scores. Buddy Loan offers such business loan with potential benefactors.

And these credit scores are linked to what we commonly refer to as the PAN. The Primary Account Number is a unique identification number assigned to every taxpayer in India. All tax-related records are linked against this single Identification number.

Although Aadhar has now taken over most of these roles, the PAN card remains an essential piece of documentation that is required for almost all finance-based decisions.

Let us have a quick look at what documents are required for applying to a business loan.

Read more: 5 Primary Factors Your Lenders Consider For Your Loan Application 

Documentation:

Buddy Loan has a varied range of investors, depending on the borrower’s requirements. Although documentation may vary from lender to lender, it spans in and around the following list.

  1. Identity proof (Aadhar Card, Driving License/PAN card/Passport/Voter ID)
  2. Address proof (Electricity bill/Telephone bill/Passport/Trade license/Lease agreement/Sales Tax certificate)
  3. Income proof (Bank statements ranging from 3 months to two years, depending on the lender’s requirements)
  4. Financial documents (ITR for the past two years along with balance sheets, Income and profit & loss a/c)
  5. Business Ownership proof (For existing business owners only. This is not applicable for start-up financing seekers)

Although documentation requirements vary from lender to lender, the PAN is a staple across the financial world due to its ease of accessibility. And as most of these transactions are electronically processed, it is always a better option to have a PAN card, if not mandatory.

 

Points to consider when you avail a personal loan to start a business

NO PAN CARD? 

If you do not have a PAN, you can always apply for one online. Once you complete your documentation, the PAN card is usually dispatched within 15 business days to your registered permanent address. Another way of going about it is to visit any government-authorized agent and get one issued to you.

Having said that, there are other ways one can go about applying for a loan. Here are some of them.

  • Ensure you have a good credit score. The average score ranges between 700-900, 700 being the average, and 900 being the highest.
  • Bank statements and ITR returns can help investors track your financial activities in the absence of a PAN.
  • A healthy relationship with your banks helps you qualify for loans.

WHY PAN card? 

Loans are simply disbursed based on address proofs, financial activity, and your ITR returns. However, citizen responsibility dictates you have a PAN. With Buddy Loan, find the best-suited investor for your needs, and make full use of the online documentation option, with a range of alternatives to make your experience of applying for a business loan sweet and hassle-free.

With lower interest rates, business loans are designed with such ingenuity that these do not hamper your current cash flow and instead aid in regulating and improving your current cash flow.

Buddy Loan helps you connect to the best-suited investor with plans tailored to your needs and requirements. With Buddy Loan by your side, running around looking for investors is a thing of the past.

Read more: 5 Primary Factors Your Lenders Consider For Your Loan Application 

Conclusion  

With the recent extension of moratorium period several public sector banks, financial institutions and NBFCs will give a margin of time to clear out earlier debts if any and relax for the repayment on the present loan. Business loans are very beneficial if you have a co-applicant and hence the loan amount is huge.

Happy financing!