Starting a business is a dream for many. In today’s modern era, where the rate of inflation continues to rise and the cost of living is at an all-time high, a job cannot fulfil all the financial needs of a family. As such many homemakers are now venturing into the business space and many have set inspiring examples. Be it handloom or handicrafts, beauty products or accessories, home décor, or edibles, homemakers are thriving as the new boss. However, the first hurdle in starting a new business is managing the finances. With a personal loan through online loan apps, you can easily kick-start your entrepreneurial journey without worrying about the financial aspects.
With the ease of application, quick approvals, and simple documentation, a personal loan stands as a much more appealing option than a business loan. With tons of paperwork, business proof, balance sheets, and more, getting a business loan in the initial days is quite a task. However, with a personal loan, the eligibility criteria are quite simple, and you can easily get up to Rs. 5 lakhs or more depending on your eligibility. For kickstarting a home business, the capital investment is usually not that high, which again makes a personal loan the perfect fit.
Here is a look at how an online loan can be a great option for you to start.
- Simple documentation: When you seek a business loan, you will be required to submit reams of paperwork. These can include your educational qualifications in the business area, copies of your business plan, projections about profit or loss, information about your experience in the business, etc. A homemaker may not have any or all of these. On the other hand, a personal loan requires you to provide only minimal documentation. Provide proof of identity (Aadhaar card or driving license), your income tax, PAN card, and your bank statement, and the loan process can start.
- Co-applicants: As a homemaker, you may not be able to present proof of your own income, unless you have something going on by the side already. In such a situation, you can add a co-applicant to the loan. Make sure the co-applicant is someone who has a good credit score and a regular income source. Now, while business loans also accept co-applicants, it is much easier to get a co-signer approved on an instant loan online. Unlike a business loan where a co-signer may also be required to prove proficiency or awareness about the business to be financed, there is no such need for a personal loan.
- Simple processing: Applying for a business loan will be a complicated, long, and winded process. You will have to visit different lender offices and ask them what forms and documentation they need. You will have to fill out their forms and submit your documentation related to business to meet the lender criteria, and then manually submit multiple copies to different departments. An online loan on the other hand has a much simpler process. Install the app on your phone, provide the relevant data and your loan application is done.
- Simple authentication and verification: With a business loan application, one thing that everyone needs to realize is that things will require a long, time taking authentication and verification process. No matter how hard you may try, there is always a risk of a small mistake in any paper you submit. This can create a lot of problems including even outright denial of loans in extreme cases. The documentation for a personal loan, on the other hand, is very simple and most of the authentication and verification is done by AI programs so the risk of documentation problems is much lower in the first place.
- Wider availability: The very nature of a business loan is such that the number of lenders providing a business loan is much lesser as compared to personal loans. Most of the lenders who offer business loans are based in large cities and towns. This can be a problem for people who do not have a lender in their vicinity. On the other hand, an online loan is by its very nature widely available. You can literally be standing on your rooftop and apply for a loan using a loan app.
- Lower charges and interest rates: A business loan, because of its inherently high-risk nature is generally given at very high-interest rates. Moreover, the lenders will also impose different types of charges and fees on the loan amount which either you may be required to pay beforehand or will be deducted from your sanctioned loan amount at the time of disbursal. This is not a problem with a personal loan because both the interest rate and the fees are much lower in comparison. Moreover, the fees and charges do not have to be paid beforehand and they are deducted from your sanctioned amount at the time of disbursal. This means you get more money to put into your business as opposed to spending on getting or servicing the debt.
Conclusion
Finally, the biggest benefit of a personal loan is the quick disbursal. When you apply for an instant loan online, the entire process is almost instant. You can get the money in your bank account anywhere between a few minutes to a few hours after applying for the loan. Barring a personal loan, no other loan, of no other kind, from no other lender, is disbursed at such a speed. This allows you to start your business as soon as possible and in cases where you want to have the first-mover advantage, this speed makes all the difference in the world. So as a homemaker looking to start your own business, choose a personal loan any day.
