Summary: Ample finance at ones disposal is required to start up a business. So, personal loans in India specifically designed for business purposes are also available to meet the unforeseen hurdles that may crop up.
Loans that are procured for the fulfilment of personal needs and expanses of individuals are generally known as personal loans. Although the purpose of providing such loans is the same, the loan amount and the rate of interest of such loans may differ from lender to lender. Some categories of personal loan that are available in India are marriage loan, pension loan, consumer durable loan, festival loan etc.
The Marriage loan amount depends on factors like repayment capacity of the borrower, market value of the security pledged for the loan, age of the client etc. In India there are various banks that take care of the retired employees who are liable for pension. Such loans are generally known as pension loan. Under such category of loan, banks in India provide up to 7 to 10 times of the amount of the last pension received by the client. Loan that is provided for purchasing consumer durable products like washing machine, TV, music system etc. is known as consumer durable loan. Under such category of personal loan a potential debtor may procure about Rs. 5000 to Rs. 20,0000 and the repayment period of such loan is generally five years. As the name indicates, festival loan is meant to fulfil the needs of individuals and their families during festivals. One can borrow at least Rs. 5000 to 50,000 at the most under this category of loan and the repayment is done by equated monthly instalments. Such loan is normally offered during the festive seasons. Personal purposes apart, even if you are interested in starting a business you can avail personal loans in India which are specifically meant for starting business. Approval for a business loan generally calls for a running business of at least two years. Unless the potential businessman is on a specific field to obtain subsidised loan, he will have to resort to regular personal loan.
There are different kinds of finances in the market that can be procured to start a business. Potential aspirants have got to understand the characteristics of such business start-up loans before applying for one. This understanding shall help them have an idea of the rate of interest, terms of loan amount, repayment programmes etc.
Secured and unsecured loans differ significantly from each other and the business start up loan may be either one. The choice depends on the loan term one is ready to face and the amount of loan one requires to initiate a trade.
When a potential debtor selects secured personal loans in India, he needs to secure an asset against the finance sought. Such, a deal lowers the risk on the part of the lender, so the potential client is liable to lower the interest rate on the loan borrowed. Moreover, he may also be entitled to higher loan amount and flexible repayment programmes. On the contrary, every characteristic reverses when it comes to unsecured personal loans in India since an individual does not secure any asset for such loans. In other words, unsecured loans may call for comparatively higher rates of interest, lower loan amount, and shorter repayment period.
The potential businessman may also look for the personal line of credit to start a business. The line of credit is a revolving source of finance that allows withdrawal of the required amount of money and the borrower can repay it the way he wishes. However, a credit limit is fixed and within that limit the client can withdraw any amount of money any number of times, provided the client does not exceed the amount limit and the due date. In addition, an entrepreneur may apply for a fixed amount of loan with a predefined repayment programme. This alternative provides for the required fund for the business but such loans are not that flexible and one is bound to budget ones needs properly so that the expanses do not surpass the loan amount.
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