Saturday, 24 October 2020

Types of Loans Available In India, How to Get Small Business Loan?

In India basically, whenever a person wants to go for a loan there are various types that you can avail depending on your requirement, depending on your eligibility criteria, there are various loans that you can avail.

Types of Loans Available In India, How to Get Small Business Loan?

Based on the collateral, the loan is classified into two factors


1. Secured loans

For borrowing the money you to provide security like an asset to the lender. in this, the ROI of the secured loans is minimum without collateral.


Types of Secured Loans 

  • Home loan
  • Loan against Property
  • Loan against Insurance Policies
  • Gold Loan
  • Loan against mutual funds
  • Loan against fixed deposits


2. Unsecured loans

In this unsecured loan, there is a need for collateral, and the money is lent to you on your credit score (CBIL) and history. To avail the loan the only thing you need to have a good credit score.


Types of Unsecured Loans 


Personal loan

Personal loans offer a fixed amount of money at a certain interest rate for a set period of time. However, unlike most loans, personal loans can be used for a wide variety of expenses, ranging from home improvement projects to paying off credit card debt.


Short term business loan

Short term business loans can be used for the expansion of the business and daily expenses by the organization and entities.


Flexi loan

Here you can avail your fund by your approved limit and only you need to pay interest of the amount.


1. Home Loan 

A home loan is basically available for the purchase of a house. so, if you want to buy a house you can go and take a home loan. Right there are various banks not only various banks actually almost all the banks they have either their own NBA FC arms or separate companies that provide loans.


What happens in this kind of a loan is you take the loan buy the property and then this property is mortgaged with the bank till the time you repay it.


2. Car Loan 

If you want to buy a car you can also go and take a loan from a bank right various banks offer car loans depending again on your eligibility criteria. You can buy various cars.


3. Loan Against Property

Let's suppose you have a property. which you are the owner of the right and what you want is you require some funds which could be required for any use, you might want to buy another property, you might require it for personal purposes or any other stuff.


In that case, you can Mortgage your property to the bank and take a loan against the property there are in certain cases there are top-up loans also, which we will discuss when we are discussing the home loans bit.


These are also norms again property in which you can take a further loan in addition to the home loan that you have.


4. Personal Loan 

In personal loans normally the loan is given based on your own credibility right your own income. There is no security in case of personal loan in most of the cases in some specific cases the bank may ask some guarantee or something but generally, these personal loans are given on the basis of the credibility or the income of the borrower and therefore they are highest interest-bearing amongst all the loans.


5. Education Loan 

If you want to pursue some higher education or even for graduation and all those stuff you can go and take an education loan when you go and apply for an education loan there are various factors considered by the bank including the family income that you may have. Your plans as to how do you propose to repay these loans and stuff. If you get through into an IIMS or maybe some other Institute's then the chances of getting these loans are very very high.


Depending on the credibility of the financial institution or rather the educational institution, not the financial institution the ease may differ from a case to case basis.


How to Get Small Business Loan for Startup?

A small business startup loan a startup business loan is basically just money lent to you to assist start or operate your business but like every loan, you'll have to pay it back. So, now that you simply are informed on the existence of small business startup loans. How does one choose a small business startup loan? A lot of the times a small business startup loan can be extremely difficult to obtain. 


Mainly because banks don't want to take a risk of lending money to an individual who shows no potential. Most businesses fail within a couple of years and banks recognize that fact meaning that any person seeking startup loans will be considered a risk.


A lot of your time patience effort and determination are going to be required to get a small business startup loan. After you have put together a solid business plan the two main places to go to obtain a small business startup loan would be banks and credit unions. These two places usually always offer small business startup loans but they will sometimes be tremendously difficult to get. 


One reason why it is often difficult is that your business plan has got to be just about flawless. Another thing that banks and credit unions check out is your credit rating. If you do not have a good credit rating then most financial institutions will deny you. Another place to look that is a little less demanding will be friends family or anybody who is willing to invest in your business.


You will need to do a lot of convincing and you'll need to be real close to them for them to want to invest in your business. if they decide not to invest that doesn't mean they're not your friends. It simply means they cannot or do not want to. Your family could also be more apt to do it because they have known you your whole life and know what you're capable of although they'll prove to yield a negative effect on your aspirations.


The easiest way of gaining some cash to just pitch yourself to as many different people as possible in hopes that your pitch will convince them to become investors in your business. If you can pitch yourself well enough and you have a solid business plan and you should not have too tough of a time finding a small business startup loan regardless of how you try to obtain the loan remember to never lose hope and to keep trying.


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