Personal Loan: There are many people among us who do not like doing jobs. Wanting to become their own boss, these people think of starting their own business. However, due to lack of money many times things are not possible. In this situation, personal loan can prove helpful. However, along with the advantages, it also has some disadvantages, which are important to think about before taking a loan.
Interest rate on personal loan
Generally personal loan is taken in emergency situations. One of its specialties is that the money is available immediately and there is no need to mortgage anything. However, before taking a loan, it is important to think about many things like interest rate in advance. Generally, the annual interest rate on personal loan ranges from 9.99 percent to 44 percent.
If someone wants to take a personal loan to start a business, then this is a better option. Approval for personal loan is easier to get as compared to business loan. If someone’s personal credit history is good, that is, if a person borrows and repays the money on time, then in that case the personal loan is available without any hassle.
Commenting on this, the CEO of Religare Finvest says that taking a personal loan to start a business can prove to be a better option for businessmen. This is especially good for small and cottage industries as it helps in reducing the funding gap.
Credit score required for personal loan
Personal loan is an easy way to meet financial needs. However, along with the higher interest rate, the repayment period is also shorter. Credit score is required for personal loan.
This is a three-digit number of your credit history, which shows how you have managed the home loans, personal loans, business loans etc. taken so far. Whether they have been paid on time or not. Generally, small entrepreneurs lack these credit scores, due to which they face difficulty in getting personal loans.
Apply in these two ways
Whether you are eligible to take a personal loan or not also depends on your income. Many times, non-profitable companies face difficulty in getting personal loans. You can apply for personal loan both online and offline provided you have identity card, bank statement, income proof etc. Before taking a loan, think carefully about the interest rate, the period for which the payment has to be made and where the benefits are more.
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