By Mahesh Shukla
Personal loans are simply loans that you can borrow for personal use. The borrowers who benefit from this loan use the money to buy things, pay school fees, pay medical bills and drugs, and add extra money to their monthly budget.
This type of loan is more convenient to apply for because no collateral is required. If you earn and your income is within the limit to qualify for the loan, you can easily take advantage of it. In addition to your income, your credit score is also a factor. A good credit score can make applying a lot easier. A good credit rating comes with a good credit history. Lenders look at your credit scores and your file to see if you are a good borrower or not. Since there is no guarantee, they rely on your payment history.
Personal loans are smaller than mortgages. However, since this loan is mainly used for personal purposes, you cannot use it to buy a house, car or other similar property. If you need to buy assets other than your personal expenses, personal loans might not be right for you.
Also, you might be wondering who is eligible for a personal loan. Unlike any other type of loan that is specific to a category or group of people, personal loans are open to anyone who is the right age to borrow, earn enough, and have documentation to show the lender. Regardless of your position, you can get personal loans as long as you can submit the full requirements.
Business loans, unlike personal loans, are only open to working professionals, such as accountants and doctors. If you work for another industry without a white collar job title, you cannot qualify for business loans.
This type of loan is more personalized to meet the needs of working professionals. According to its definition, business loans are created to help these people finance or develop their business to practice their profession. So, for example, if you are a doctor who is planning to open a clinic somewhere in India, you can apply for a business loan to be successful in making your plans a reality.
Because it is personalized, this loan meets the needs of working professionals. The lender takes into account your income and your financial ability to pay. You can avail big loans for your expenses with lower interest rates, and the application is processed within the day, depending on the lender.
How to get the loan?
The next thing to do is find a lender to get the loan from. But, where and how to choose one? Before, you had to go to the bank and go through a lot of paperwork before you could submit your application. Thanks to technology, you can now do everything online. You can get personal and business loans from online lenders. There are many lenders online with these types of loans. In fact, now you can apply online by uploading your documents to the official website of the lender you have chosen.
Just make sure that when choosing the right lender that you take several factors into account, such as the interest rate, possible charges and penalties for default or late payment, and processing fees. Compare several lenders to get the best deal on the market.
The writer is founder and CEO of PayMe India