How a Personal Loan can help you fulfil your entrepreneurial dream

The debt financing market, in particular, has undergone a rapid transformation. Entrepreneurs and small business owners sometimes overlook personal loans while considering financing options for their business. Like business loans, personal loans can be an extremely useful and prompt financing option for your business.

Here’s how a personal loan can help you fulfil your business dream:

1. Personal loans are well, personal 

One of the best things about personal loans is that it is up to you how you use them. They can be used for various reasons, from buying a gadget, going on a vacation, your home renovation project, or getting married. As it turns out, a personal loan can also infuse new life into your business. For self-employed entrepreneurs in the initial phase of business, applying and qualifying for conventional business loans can sometimes be challenging. This is because the eligibility criteria are more stringent, and the process may be lengthy. Instead, options like the IDFC FIRST Bank instant loan app can empower entrepreneurs to enjoy a quick, paperless disbursal of loans.

2. Prompt approval

Personal loans are disbursed fairly quickly and don’t have a lengthy approval process or duration needed for some other loan types. With IDFC FIRST Bank, you can get personal loans of up to 1 Cr in a short period with a paperless and hassle-free application process that can be completed online. The repayment tenures are also flexible, ranging from 6 months to 84 months. You also have the option to make up to 40% part payment and transfer existing personal loans/credit cards for enhanced convenience. 

3. Competitive interest rates

As opposed to business loans, personal loans enjoy a highly competitive interest rate. For example, IDFC FIRST Bank offers an attractive interest rate for personal loans, starting at just 10.75% and with EMIs of Rs. 1699/lakh. To easily calculate the estimated interest rate, you can use IDFC FIRST Bank's personal loan EMI calculator.

4. Collateral-free loans 

Personal loans are unsecured. This means that instead of looking at the borrower’s assets as security, lenders offer loans based on your credit score. So, for instance, IDFC FIRST Bank doesn’t ask for any collateral or security against the loan. The loans are disbursed at the discretion of the bank, determined by the creditworthiness of the applicant. In addition, business owners don’t need a co-signee or a guarantor, making the entire loan application process easy and effortless.

5. Positive impact on credit score

An individual’s creditworthiness depends on their credit score. One of the factors that decide the credit score is if the debt is paid on time. Other factors include credit history, repayment record, length of credit history, and credit mix. If you use credit responsibly, it can have a positive impact on your credit score. Timely payments and not defaulting on payments can help entrepreneurs build a strong record reflecting on their overall credit score. Moreover, a personal loan can help strengthen the length of credit history and contribute towards the credit mix too. 

6. Simple eligibility criteria

Whereas other types of loans may have more stringent eligibility criteria, it is easier to qualify for a personal loan. IDFC FIRST Bank makes it quite easy for both salaried and self-employed applicants to avail of a personal loan. For business owners, the minimum qualifying age is 25 years, whereas the maximum allowed age is 65 years at the time of loan maturity. In addition, the business must have been in existence for a minimum period of three years. The loan is disbursed easily through a digital loan journey with minimum documentation requirements and eSign capabilities. 

For entrepreneurs facing a cash crunch, a personal loan is a smart and easy fix to overcome the shortfall and make headway quickly.  With competitive interest rates, digital application journeys, flexible tenure, and the ability to balance the transfer of existing personal loans, IDFC FIRST Bank’s personal loan is an attractive option for entrepreneurs to not only meet their current goals but also plan future ones.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.