A Business loan, also known as a commercial loan are the one that are borrowed especially for investment in a business. They could be used to cater to the urgent needs of your sprouting business.
- The borrower should be a self-employed professional, manufacturer, retailer or a trader.
- The minimum age to apply for a loan application is 22 years.
- The maximum age at the time of loan maturity should be 65 years.
- Borrower’s minimum turnover should be Rs.10,00,000.
- The individual should be running the business for three years and have at least five years of business experience.
- Profit earned by the borrower should be a minimum of Rs.2,00,000.
A personal loan, also known as a signature loan or unprotected loan are the ones that you can sanction without the need of any collateral and with minimum documentation. The procedure is hence rapid and straightforward. You can get the loan amount in your account in a few hours to about five days depending on the lender and the loan amount. Personal loan are generally approved by just scrutinising the credit history and income of the individual. Credit cards are also a good way of getting personal loans. Loan amount of up to Rs.25 lakh could be sanctioned depending on your credit history and lender.
Eligibility criteria to get a personal loan
- The borrower should be a citizen of India.
- Minimum age of the individual should be 21 years.
- The individual needs to be self-employed.
- Maximum age at the time of maturity of the loan should be 65 years.
- Minimum turnover needs to be Rs.1,00,000.
Repayment of loan
Interest rates on a business loan in India usually vary from 11% to 19% depending on the lender. The repayment tenure can be anything between 1 to 5 years depending on the borrower. Although the period might vary from lender to lender. You can also repay the loan before the end of the tenure.
Personal loans can be the better option out of the two if you want to use it on buying flight tickets for your vacation, renovate your home or at times of emergencies since they are processed quickly with no collateral and minimum documentation. But if you require more substantial capital to invest in your growing business, go for the second option.