Will it be better to take a business loan or a personal loan? Indian Money reviews both options so that you can select the option that will be most suitable for you.
Indian Money Review – Should a Person Take a Personal or Business Loan?
This kind of loan falls in the category of short term loans and helps people meet their financial emergencies. Moreover, as a borrower you will have to repay this type of loan within a period of one to seven years.
As per Indian Money CEO, these loans are considered unsecured loans since there is no collateral or security used for this type of loan. Additionally, since these are unsecured loans, banks and other lending agencies tend to charge a higher rate of interest for such loans.
As the name suggests, these loans are taken primarily for business purposes and help with tasks like meeting working capital requirement, business expansion, and other similar requirements.
So, which type of loan is better? Let us look at the details in the following section.
IndianMoney.com Review –Which is better, a personal loan or business loan?
1. It is easier to get a personal loan compared to a business loan.
2. Banks will not be asking why you want a personal loan. On the other hand, when you take a business loan, lenders will be checking your business plan, credit score, and rest of your financial statements.
3. Personal loans have lesser processing time than business loans.
4. You will have to pledge collateral for obtaining a business loan but such requirement does not exist for personal loans.
5. If a personal loan is taken then repayments are not made in time then it can have negative effect on credit score.
6. By taking a business loan you are able to separate your business from personal finances. Additionally, you will not have personal liability if there is a business default.