Today loan providers offer unsecured personal loan to applicants to help them suffice their personal financial obligations. They also provide a business loan to cater to the growing needs of the business.
However, it must be understood that both the loan have a distinct purpose. They are taken to manage financial obligations of a different nature.
Here’s why you must avail separate loans for specific financial needs -
1) Purpose of the loan
Unsecured Personal loan is an all-purpose loan which can be used to cater to various personal and professional financial obligations. Lenders do not scrutinize the usage of the loan and it can be used for any purpose.
While, a business loan is taken to cater to business requirements such as to expand the business to the new city, scale up business operations, purchase new inventory, lease bigger office space, hire new staff, settle payroll, for debt consolidation and much more.
2) CIBIL Rating
Applicants with a good credit rating of 750+ or more stand a higher chance to avail a personal loan. This is because it is a measure of your creditworthiness and it helps to win the trust of your lenders easily. Besides, lenders are willing to negotiate loan terms with such applicants and offer them a higher loan amount at a lower rate of interest.
While the same applies for a business loan too as it is also unsecured in nature.
3) Consolidate Debts
The personal loan, as well as the business loan, can be used to pay off your existing debts. However, it is advised to use the two loans for a separate purpose that they are intended for. This is important because it allows the borrower to easily settle respective financial obligations.
Read more: Here’s Why you Should Keep a Personal Loan and Business Loan Separate
However, it must be understood that both the loan have a distinct purpose. They are taken to manage financial obligations of a different nature.
Here’s why you must avail separate loans for specific financial needs -
1) Purpose of the loan
Unsecured Personal loan is an all-purpose loan which can be used to cater to various personal and professional financial obligations. Lenders do not scrutinize the usage of the loan and it can be used for any purpose.
While, a business loan is taken to cater to business requirements such as to expand the business to the new city, scale up business operations, purchase new inventory, lease bigger office space, hire new staff, settle payroll, for debt consolidation and much more.
2) CIBIL Rating
Applicants with a good credit rating of 750+ or more stand a higher chance to avail a personal loan. This is because it is a measure of your creditworthiness and it helps to win the trust of your lenders easily. Besides, lenders are willing to negotiate loan terms with such applicants and offer them a higher loan amount at a lower rate of interest.
While the same applies for a business loan too as it is also unsecured in nature.
3) Consolidate Debts
The personal loan, as well as the business loan, can be used to pay off your existing debts. However, it is advised to use the two loans for a separate purpose that they are intended for. This is important because it allows the borrower to easily settle respective financial obligations.
Read more: Here’s Why you Should Keep a Personal Loan and Business Loan Separate
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