Personal Loan Vs Business Loan
The difference between a personal loan and a business loan can be explained easily. One is taken to meet personal expenses while the other is used as payment for business expenses. At Finnable, we help you achieve your personal goals by making the process of applying for and receiving a personal loan easier. So let us understand the basic difference between personal and business loans.
What Is a Personal Loan?
As the name suggests, a personal loan is usually a small unsecured loan taken to fulfil personal obligations. This could help you pay for home renovations, a lavish wedding, or even settle some personal debt. Connect with Finnable to know more about personal loans.
Advantages of Personal Loan
The biggest benefit of a personal loan is that it is a great source of quick funds. Apart from minimal documentation, no collateral is required against this type of loan. This translates into a faster application process as well. Depending on the type of personal loan (secured or unsecured) you apply for, the interest rates could vary.
What Is a Business Loan?
A business loan is taken to fund business requirements and expenses. It is an addition to the firm’s working capital and could include paying salaries, buying machinery, etc. This is a secured loan; hence, the interest rate is lower than that of a personal loan. This should not be mistaken for a business line of credit, usually taken to meet short-term requirements of the business, and where the interest is charged only on the withdrawn amount.
Advantages of Business Loan
Business loans are accessible at lower interest rates and can be availed for short- and long-term durations. You can take small business loans as well as larger amounts, depending on the requirement of the business.
Personal Loan vs Business Loan
No collateral is needed
You need to submit collateral as well as business plans and the intended use of money.
Sometimes offered at a higher rate of interest than
Sometimes a lower rate of interest
Tenure is usually short
Can be availed for both long and short terms.
No tax benefits
Some business loans can afford you some tax exemptions and benefits.
To qualify the lender generally calculates the debt to income ratio
The eligibility criteria are more stringent. You could be asked to submit your profit and loss statements, business plan, as well as a loan repayment plan
Finnable: Your One-Stop Shop for Personal Loans
In today’s time, we tend to need personal loans in case of a financial emergency. If you require a personal loan, you can easily start by checking your eligibility. Finnable has a personal loan app where checking your eligibility, deciding on your tenure and calculating the EMI becomes a hassle-free and stress-free process. We also provide instant personal loans of up to Rs 10 lakhs with the fastest loan approval apps. What’s more, we also disburse the loan amount within 6 hours of document verification. Contact us to know more about personal loans and get one approved for yourself today.
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