People can use a loan to meet up with the required money. When you do not have enough money to meet your requirements, you can take a loan, which has to be paid back in a monthly EMI.
There are many types of loans out there; here, this article will concentrate on a personal loan and connect a personal loan with business.
What is a personal loan?
It is a type of credit available in the market, which people can use to quick cash. The various options for an individual for credit are home loans, educational loan, gold loan, farmers loan, pension loan etc., and all these are a secured loan, where you have to submit collateral when you take a loan.
A personal loan is an unsecured loan, where there is no collateral exchanged as a security for the lender while giving the borrower the fund. A personal loan can be used for many purposes, whether for conducting a marriage, a meeting, spending on vacations, or shopping. The interest rate of a personal loan is low as compared to the interest of a credit card. People can use a personal loan to make big purchases, as you have a lesser interest rate than credit cards.
What is a business loan?
A business loan is of a different kind. The differentiation is based on its interest rate, short term / long term, use (whether it’s for a significant business firm or a small firm)etc. The loan amount, tenure, interest rate, terms and conditions depend on the borrower’s credit score and the firm’s size.
Comparison between a business loan and a personal loan?
Advantages of personal loan
Higher payment rates than credit cards themselves: a personal loan is more flexible and versatile. People can use it for many purposes, i.e. marriage, education, purchasing assets, purchasing property, and paying off other debts.
Simple eligibility:
No financial promise required: No collateral is required while using a personal loan. Financial promises can be a building, deed of ownership, car, gold etc.
Lesser interest rate, higher borrowing limit: The lower the interest rate, the more it becomes unburden some. Customers with an excellent credit history can avail of a good amount of crest from the bank.
Business loan advantages:
Quick application process: The process to apply for a business loan is relatively easy; you just need to visit the online website and apply; there is no need for a person to visit the lender’s branch. Punjab and sind bank personal loan is an excellent option to choose a personal loan.
Collateral free loan: this loan is collateral-free, i.e. you don’t have to pledge any asset while taking a business long. But in a particular type of business loan on keeps assets like machinery, plant etc., unlike other loans, such as home loan, gold loan, you don’t have to keep collateral.
Large loan amounts: With a business loan, you can take an immense loan amount. It goes up to Rs.2 crores. This amount can be taken as per your business’s requirement and help you handle the financial emergency without any hassle.
Flexible tenure: The maximum tenure can last up to 10 years for a business loan and is flexible; you can pay back the repayment as your capability.
What is the eligibility of a personal loan and a business loan?
Personal loan eligibility:
- Employees should be working in certain private companies or central, state, district, and local bodies.
- The age limit should be from 21-60.
- Should have a contract of 1 year and must be working for two years before the head.
- Must have a minimum salary of 25,000 if having a salary account, and differs according to banks.
Conclusion: Taking loans or in a particular personal loan has its benefits or features, mistakes or its cons. These loans are used for a variety of purposes, including weddings, home renovations, and college. People can also use a personal loan to start a business or to meet the expenses of one.
Read More:- Measures to be Taken and Mistakes to be Dodged in Personal Loan
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