The very first option that comes to mind while thinking about backing your ambitions as an entrepreneur is a business loan. Growing businesses are eligible for business loans, which frequently have minimum turnover requirements. In addition, business loans are granted after considering everything: the type of business, the security asset presented, the goal of the loan, etc. However, being approved for a business loan might be challenging for a prospective entrepreneur.
When looking for ways to bring in money for your business, you are hesitant to think about taking out a personal loan. Business demands may also be handled by using personal loans. Personal loans are unsecured loans that you can utilize for any reason you see fit. These are some of the reasons why entrepreneurs might have to choose it over loan alternatives.
The Difficulties Faced by Any Business Loan Applicant
Getting a business loan often proves difficult since banks set specific requirements. Not every start-up business can meet these criteria. They feel uneasy about some additional factors.
The Failure to Offer Collateral
Collateral is used as security for business loans. It could be difficult for small and startup companies. For them to provide sufficient security to back up a business loan when applying for finance is quite tough.
- Bad Credit
A young start-up owner might not have accumulated a high credit score yet, as it takes time to build up. They have to initially maintain a perfect credit history to raise their personal credit score. It is not a good idea to apply for business loans with a poor credit score if you are in a hurry.
- Low Earnings
A business’s revenue flow provides insight into your ability to make repayments. The income threshold may be greater for a business loan.
- Little Capital Investment
The business profile is essential for approving a startup loan. A business request for funding is frequently denied due to little capital investment, which makes the firm’s profile look weak.
Check Here for the Best Business Loan Offers in 2024
| Loan Provider | Minimum Turnover Required | Loan Size | Tenure | Interest Rate Range | CIBIL Score | Processing Fee | Foreclosure Charges |
| POONAWALA FINANCE | No minimum criteria | 1.00 Lacs – 10.00 Lacs | 12 Months – 36 Months | 16% – 20% (Reducing Per Annum) | 700 or above | 1% – 2% | 1% – 4% |
| POONAWALA FINANCE (SMALL) | 30.00 Lacs | 2.00 Lacs – 10.00 Lacs | 24 Months – 36 Months | 18.75% – 20% (Reducing Per Annum) | 700 or above | 2% – 4% | 3% – 4% |
| INCRED BUSINESS LOAN | No minimum criteria | 50.00 k – 10.00 Lacs | 12 Months – 60 Months | 16% – 33% (Reducing Per Annum) | 650 or above | 2% – 5% | 1% – 4% |
| FLEXI BUSINESS LOAN | 20.00 Lacs | 1.00 Lacs – 25.00 Lacs | 12 Months – 36 Months | 18% – 30% (Reducing Per Annum) | 700 or above | 3% – 4% | 4% – 5% |
| INDIFI UNSECURED BUSINESS LOAN | 20.00 Lacs | 1.00 Lacs – 30.00 Lacs | 12 Months – 36 Months | 18% – 30% (Reducing Per Annum) | 700 or above | 3% – 4% | 4% – 5% |
| PAYSENSE BUSINESS LOAN | No minimum criteria | 50.00 k – 10.00 Lacs | 6 Months – 60 Months | 18% – 22% (Reducing Per Annum) | 700 or above | 2% – 6% | 4% – 5% |
| MONEY VIEW BUSINESS LOAN | No minimum criteria | 5.00 k – 5.00 Lacs | 3 Months – 60 Months | 16% – 36% (Reducing Per Annum) | 650 or above | 2% – 5% | 2% – 5% |
| HERO FINCORP BUSINESS LOAN (SMALL VERTICAL) | No minimum criteria | 1.00 Lacs – 5.00 Lacs | 12 Months – 60 Months | 19% – 27% (Reducing Per Annum) | 630 or above | 2% – 4% | 4% – 5% |
| AMBIT FINANCE BUSINESS LOAN | 50.00 Lacs | 2.00 Lacs – 50.00 Lacs | 12 Months – 36 Months | 20% – 28% (Reducing Per Annum) | 675 or above | 3% – 3.5% | 4% – 5% |
| GET VANTAGE BUSINESS LOAN | 1.20 cr | 5.00 Lacs – 10.00 cr | 12 Months – 15 Months | 16% – 20% (Reducing Per Annum) | 700 or above | 5% – 8% | 1% – 4% |
| RECUR CLUB BUSINESS LOAN | 1.00 cr | 10.00 Lacs – 10.00 cr | 12 Months – 24 Months | 16% – 20% (Reducing Per Annum) | 650 or above | 2% – 3% | 2% – 5% |
| ARKA BUSINESS LOAN | 1.00 cr | 1.00 Lacs – 30.00 Lacs | 12 Months – 36 Months | 18% – 20% (Reducing Per Annum) | 700 or above | 2% – 3% | 4% – 5% |
| FINAGG SUPPLY CHAIN FINANCE | No minimum criteria | 1.00 Lacs – 50.00 Lacs | 1 Months – 3 Months | 18% – 20% (Reducing Per Annum) | 700 or above | 2% – 3% | 4% – 5% |
| HDFC BANK BUSINESS LOAN | 1.00 cr | 1.00 Lacs – 75.00 Lacs | 12 Months – 48 Months | 16% – 18% (Reducing Per Annum) | 700 or above | 1% – 2% | 1% – 4% |
| ICICI BANK BUSINESS LOAN | 1.00 cr | 10.00 Lacs – 1.00 cr | 13 Months – 48 Months | 16% – 18.5% (Reducing Per Annum) | 700 or above | 1.5% – 2% | 4% – 5% |
| YES BANK BUSINESS LOAN | 1.00 cr | 5.00 Lacs – 50.00 Lacs | 12 Months – 36 Months | 16.5% – 19.5% (Reducing Per Annum) | 650 or above | 2.5% – 4% | 3% – 4% |
| INDUSIND BANK BUSINESS LOAN | 1.00 cr | 10.00 Lacs – 50.00 Lacs | 12 Months – 36 Months | 16% – 20% (Reducing Per Annum) | 680 or above | 2% – 3% | 3% – 4% |
| AXIS BANK BUSINESS LOAN | 50.00 Lacs | 5.00 Lacs – 75.00 Lacs | 12 Months – 36 Months | 16% – 18% (Reducing Per Annum) | 700 or above | 1.75% – 3% | 4% – 5% |
| KOTAK MAHINDRA BUSINESS LOAN | 50.00 Lacs | 5.00 Lacs – 2.00 cr | 12 Months – 36 Months | 16% – 18% (Reducing Per Annum) | 630 or above | 2% – 3% | 4% – 5% |
| DEUTSCHE BANK BUSINESS LOAN | 2.50 cr | 15.00 Lacs – 1.00 cr | 12 Months – 36 Months |
Once you have decided to launch a new business, you will need to secure some initial funding. Many people decide to apply for a business loan in such a situation. However, it is almost impossible to secure a business loan for an unestablished company. Several specifications are requested by a business loan lender.
Among them, the age of the firm, the comprehensiveness of the business plan, the credit score of the company, etc., are the most common factors. Providing these for an enterprise that hasn’t yet launched is undoubtedly tough. Seeking investors is the next step in action. This is also not a simple task for startups. Your only remaining choice is to apply for a personal loan. Continue reading to learn more about getting a loan to get started with your business.
Why Should Young Entrepreneurs Use a Personal Loan for Their Business Needs?
Because there is no need for security or collateral. Asking for a personal loan for business usage is simple. It is also quick, and all you need to do is keep up a high credit score. A personal loan is given to someone to utilize for any purpose they choose. This could include paying medical bills, covering wedding costs, or, in this example, launching or expanding a business.
- Criteria for a Personal Loan
- A high credit rating
- Low ratio of debt to income
- Consistent Revenue
The eligibility requirements make it clear that getting a personal loan for starting a business is far simpler. The lender you choose for a business loan wants to know your business’s duration, yearly income, and credit score. With proof of documentation you can be approved for a loan in this case.
Personal Loan Highlights 2024
| Loan Provider | Minimum Income | Loan Amount Range | Loan Tenure Range | Interest Rate Range | CIBIL Score Requirement | Processing Fees Range |
| Hero Fincorp | ₹15.00k | ₹50.00k – ₹10.00L | 12M – 60M | 9.5% – 16% | 700 or above | 1% – 5% |
| Cash Out | ₹12.00k | ₹10.00k – ₹4.00L | 4M – 4M | 1.5% – 3% | 550 or above | 1.5% – 2% |
| Stashfin | ₹20.00k | ₹5.00k – ₹5.00L | 9M – 36M | 2.45% – 4% | 725 or above | 2% – 2% |
| KreditBee | ₹16.00k | ₹1.00k – ₹3.00L | 1D – 4M | 1.5% – 3% | 550 or above | 5% – 6% |
| FlexSalary | ₹8.00k | ₹4.00k – ₹2.00L | 6M – 60M | 1.5% – 3% | 550 or above | ₹300 – ₹750 |
| Mpokket | ₹9.00k | ₹500 – ₹30.00k | 1W – 4M | 2% – 4% | 550 or above | ₹50 – ₹200 |
| Rk Bansal | ₹25.00k | ₹10.00k – ₹50.00k | 7D – 1M | 1% – 1% | 650 or above | – |
| Werize | ₹12.00k | ₹30.00k – ₹5.00L | 12M – 36M | 15% – 22% | 650 or above | 3% – 5% |
| IDFC Bank | ₹20.00k | ₹1.00L – ₹40.00L | 12M – 60M | 10.49% – 22% | 700 or above | 1% – 4% |
| Aditya Birla | ₹20.00k | ₹1.00L – ₹50.00L | 12M – 84M | 12% – 28% | 650 or above | 1% – 4% |
| Muthoot Finance | ₹20.00k | ₹1.00L – ₹7.50L | 12M – 60M | 14% – 22% | 685 or above | 1% – 3% |
| Tata Capital | ₹25.00k | ₹75.00k – ₹25.00L | 12M – 60M | 10.5% – 14.25% | 720 or above | 0.75% – 2% |
| Standard Chartered | ₹50.00k | ₹1.00L – ₹1.00cr | 12M – 60M | 11.49% – 20% | 740 or above | 1% – 3% |
| Bajaj Finserv (Prime) | ₹38.00k | ₹1.00L – ₹35.00L | 12M – 84M | 13.5% – 15% | 685 or above | 0.5% – 1.5% |
| Axis Bank | ₹25.00k | ₹1.00L – ₹40.00L | 12M – 60M | 11.15% – 16.25% | 690 or above | 1% – 4% |
| ICICI Bank | ₹40.00k | ₹1.00L – ₹1.00cr | 12M – 72M | 10.5% – 15% | 700 or above | 0.5% – 1.5% |
| Fullerton | ₹25.00k | ₹1.00L – ₹25.00L | 12M – 60M | 14% – 32% | 705 or above | 1% – 3% |
| HDFC Bank | ₹25.00k | ₹1.00L – ₹1.00cr | 12M – 72M | 10.25% – 16% | 700 or above | 0.5% – 1.5% |
| Loan Tap | ₹12.00k | ₹50.00k – ₹7.00L | 12M – 36M | 11% – 24% | 675 or above | 1% – 2% |
| Insta Money | ₹15.00k | ₹5.00k – ₹25.00k | 1M – 6M | 13% – 36% | 650 or above | 1% – 4% |
| Kotak Bank | ₹25.00k | ₹1.00L – ₹50.00L | 12M – 60M | 10.75% – 22% | 705 or above | 0.75% – 2.5% |
| Cholamandalam | ₹20.00k | ₹1.00L – ₹35.00L | 6M – 60M | 14% – 22% | 675 or above | 1% – 3% |
| SBM | ₹20.00k | ₹50.00k – ₹25.00L | 6M – 60M | 14% – 20% | 700 or above | 1% – 4% |
| Axis Finance | ₹50.00k | ₹1.00L – ₹50.00L | 12M – 60M | 14% – 16% | 650 or above | 1% – 3% |
When is Using a Personal Loan for Business Beneficial?
Seeking a business loan can be challenging for certain businesses. Particularly for those who are starting or are relatively young, it’s challenging. Banks typically reject their loan requests because they lack the necessary business vintage. Personal loans can be an excellent way for these companies to secure capital for business expansion.
Whenever an individual takes out a personal loan, his business, rather than him, is responsible for repaying the loan balance. As a result, however well the business does, you must repay the debt. It might be one of their best credit possibilities if they are ready to accept the risk.
Credit scores can be severely impacted by late repayments. So, it’s important to look at your financial situation while asking for a personal loan. When you are using the loan to pay business-related expenses, you must evaluate the financial standing of the business. These maybe in terms of revenue, profitability, expenses, and projections for future years, among other things.
How and Where to Apply for a Personal Loan?
Complete the procedures outlined below to apply for a personal loan effortlessly.
- Go to https://referloan.in/loans/personal-loan
- Select a lender that best fits your needs.
- Enter your personal information to check whether you’re eligible for loans in just a few minutes.
- Choose the swift loan offering and payback plan of your preference.
- Attach all relevant papers digitally in PDF format.
- Following approval, receive the requested money directly into your bank account within 5–6 working days.
- Keep in mind that the documentation provided above is officially authorized at the moment you submit your request for a loan.
If you choose platforms like Refer Loan, you can get your personal loan or business loan seamlessly.
Bottom Line:
Filing for loans for which you might not be eligible should be avoided by thoroughly checking the the eligibility criteria of various lenders. If you check Refer Loan’s portal, you will get multiple options. You can pick up the best as per your preference. Avoiding filling out forms that are probably going to be rejected helps save you some effort and time. In addition, receiving several loan refusals in a short period of time may negatively impact your credit score. It is crucial to confirm your loan eligibility in advance.
You can finance your startup with personal and loan products. The secret is to know how the two benefit and select the one that best meets your demands. If your business requires a large amount of money immediately, a small-business loan can be a better choice. When you are capable of making the installments every month and have strong credit, a personal loan is perhaps a better option.