Karol Bagh is a locality in the Central District of Delhi. It is a mixed residential-cum-commercial area famous for street shopping. This beautiful neighbourhood connects the top hospitals, schools, colleges, markets, and many more. Also, this place provides you lip-smacking foods at a reasonable rate. Karol Bagh is the oldest, most famous, and most flourishing shopping area in Delhi. The whole market is divided into many parts, where each one is specialised for a particular one. You can get garments, books, jewellery, electronic gadgets, etc. As a crowded place, this is the best location for you to initiate your dream business. Initiating a new business in a competitive environment is risky and tricky. Sometimes you may have an excellent business idea but no resources to fund it. Now, don’t worry about it. You can easily get a Personal Loan in Karol Bagh and can kick start your business ideas.
This article will help you know about personal loans for business and guide you to get a quick loan.
Personal Loan for Business
A personal loan for business is an unsecured loan that helps you meet your financial emergencies. You can use this loan to start your business, expand your existing business, boost production, and more. You don’t need to provide any collateral for applying for this loan. For self-employed individuals, it is necessary to use a loan for business to straighten up their finances. A quick fund can help you make on-time payments and purchases to ensure the good functioning of your business.
You can get a personal loan in Karol Bagh through Buddy Loan. It is one of the best aggregators that offer loans in various categories, and it is easy to access and the most convenient source for funds in an emergency.
Personal Loan for Business Purpose:
You can go for a business loan when you have the following requirements.
Start or launch your new business :
You may have an amazing business idea and want to make it a reality. But you may have no financial sources for funding to initiate. Then you can apply for a personal loan to cover your needs.
Expanding your existing business :
You may consider expanding your business when it gives an excellent ROI(Return On Invest) and profits. It is a big process that needs huge investments to launch new products and services, expand your operations and production, and more. Therefore a business loan will help you to make it successful.
New equipment and machinery :
In this competitive world, sustaining a business is very challenging. You should know current market trends, updated technologies, and your competitors’ moves. To stay updated in the business, you must use the latest equipment and machinery. To establish these, you need more funds. And a personal loan from Buddy Loan can handle these expenses smartly.
Inventory management :
It includes managing raw materials, collecting components from suppliers, warehousing the products, and reaching the final product to customers. It is a record that tracks purchases and sales of products to users. You can use a business loan to meet these expenses.
Human resource management :
When starting a business, you need talented people to make your start-up a successful venture. For a new company, it isn’t easy to handle the cost of hiring, training, and mentoring people. So they can opt for a personal loan to cover the expenses.
Marketing strategy :
Different entrepreneurs use various marketing strategies to enhance their business and attract customers. It is very important to make higher profits. Therefore, to settle this, you can use a personal loan.
Features of Personal Loan for Business
- Collateral-free -: Unlike secured loans, you don’t need to submit a guarantee for loan approval.
- No hidden charges -: There are no hidden or pre-payment charges related to a personal loan.
- Minimum documents are needed -: You only need documents such as PAN, Aadhar, and the last 3 months’ bank statements. Documentation may vary depending on the lender.
- Quick approval -: You can avail the loan quickly once the lenders find your application eligible. After KYC verification, there will be immediate approval.
- Flexible loan tenures -: You can obtain a loan of Rs.10,000 to 15 lakhs, which can be paid back through EMIs over a tenure of 6 months to 5 years. You can choose the tenure according to your budget.
- Quick disbursal of the loan -: In this digital era, once your loan is approved, the amount will be disbursed directly into your account within 24 – 48 hours.
- Paperless process -: Nowadays, no need for you to visit a bank to obtain a loan. You can apply for it from an official website or a mobile application.
- Better interest rates -: You will be getting interest rates starting from 11.99%. If you have a good credit score, you can get a personal loan instantly with a low-interest rate.
- Safety of your loan -: Information you share will be kept confidential from any third party.
Eligibility for a Business Loan
Following are the eligibility criteria for approval for personal loans for business. These factors may vary for different lenders.
- Must be an Indian citizen.
- Age should be over 21 years
- A registered business entity is a must, and for the last three years, your business should be running successfully with profits and ROI.
- Individual entrepreneurs, manufacturers, public and private companies, partnership firms, etc., are eligible for this loan.
- Yearly turnover for your business should be above INR 12 lakhs.
- No pending debts should be there.
- Your credit score must be above 700.
Documents needed for a Personal Loan
The common documents needed for applying for an online personal loan are listed below.
- Identity proof – Aadhar, PAN, Driving licence, passport, etc.
- Address proof – Voter ID, landline bill, utility bills(water/gas/electricity)
- Bank statements for the last three months.
- Three months salary slips.
- Last three years’ Income tax returns.
- Last three years Audited Balance Sheet and Profit & Loss statements.
Things to remember while taking a Personal Loan for Business.
- Credit Score -: It is a vital factor when approving a loan for you. It decides the interest rates you get. A credit score reflects your overall financial transactions, including your loans, monthly payments, credit behaviour, and past credit history. A higher credit score above 700 will increase your credibility with the lenders. Eventually, you will get a low-interest rate.
- Loan amount -: Easily accessible personal loans might make you tempted to get more than required. But you must be alert and get a loan only for the needed amount. It will help you from getting defaults and debts.
- EMI -: Calculate the EMI with an online EMI calculator and plan your monthly due according to that. It will avoid any trouble in your monthly budget.
- Relationship with the lender -: If you have made a long-time transaction with a bank and are in good relation with them, you will be eligible for a loan sooner. With your good credit history, the lender will consider you trustworthy. So you have a greater chance of getting low-interest benefits than others.
- Interest rates -: Before applying for a personal loan, always compare various lenders and their offers to negotiate better interest rates.
- Other charges -: there are other charges for loan approval, like GST of 18% and a processing fee of 0.5%.
- History of defaults -: Similar to credit score, you should avoid any defaults in your credit history. If anything is found, you will be charged with high-interest rates or might get rejected for the loan. Lenders prefer people with no defaults in their credit over the past 12 months.
Tips to Improve Credit Score
- Maintain a regular payment habit -: Making your payments on time is very important. So, always pay your credit card bills, loan repayments, and EMIs. You can make the payments by setting a reminder or an automatic payment option. Eventually, it will have an impact on your credit score.
- Payment of outstanding balance -: Pay off your outstanding credit balance soon. Because if you have more outstanding dues, your credit score will decline. Clear all the dues to increase your credit limit along with your credit score.
- Always check your credit report -: Check your credit report to avoid errors and fraud. If not, those errors will impact your credit score. A false report can lower your credit score.
- A balance between credits -: Maintain a balance between secured and unsecured loans. A higher proportion of anyone will lower your score.
- Don’t apply for multiple credits -: A new credit benefits your credit score. A hard inquiry from the lender’s side will be there when you apply for a loan. So multiple credits will lead to more hard inquiries. A hard inquiry can stay back on the credit report for two years. So multiple hard inquiries in a short period will create a fall in your credit score and loan rejections in the future.
- Be patient -: improving a credit score will not happen in one night. You need to monitor your credit reports, your credits, your spending pattern, and repayment dues. Over time, you will get a higher credit score to improve your creditworthiness.
Starting your dream business and sustaining among the competitors in Karol Bagh is challenging. But with proper planning and maintaining of your dealings legally and honestly, you can survive in the business world. Gradually, you can taste the fruits of success too.
What is a personal loan for business?
It is an unsecured loan that you can use for small or large-scale business purposes.
What are the documents required for a business loan?
You need ID proof, Income proof, and address proof.
What is the maximum loan you can get?
You can get a loan upto 15 lakhs, with a repayment tenure of 6 months from 5 years.