5 Simple Ways For Self-Employed Professionals To Get Business Loans

If you are a self-employed professional, your scope of work increases from just using your skills to managing clients, finances and a variety of other documents. For many self-employed professionals, the biggest challenge is securing finances to get the business going.

Before you go into a panic, here are some simple ways in which can secure business loans-

Do Your Research
Research on the various types of business loans available. They include term loans, overdrafts, start-up loans and working capital loans. Find out the business loan interest rate, fees, terms etc. of various lenders. Do not forget to research the reputation of the lender. Choose a lender and a type of business loan that best suits your needs.

Show steady cash flow
You can maximise on your chances of securing a business loan if you are able to show your professional capabilities can attract businesses and generate cash. It is desirable for you to have a steady income throughout. Keep your bank statements, financial statements, and tax return ready to show the lender while applying for the loan.

A Foolproof Business Plan
As a self-employed professional, you must know exactly what work you intend to do and how you plan to finance the business. You should also know the challenges and have a plan to mitigate them. All this information has to be written down in a professional and presentable manner. The more realistic, detailed and loophole-free your plan is the better are your prospects of securing a business loan.

Have the Documents in Place
Getting a business loan is all about reputation. Investors want to invest in people who know their business. If you present all required documents in an organized manner, the entire process becomes much quicker and convenient.
Find out the list of documents required, which includes application forms, tax returns, Form 16A, balance sheets etc.

Getting Around Existing Debts
If you have existing debts, the lender's interest to fund you may drop. The best way to avoid this is to guarantee the lender that the borrowed money would be used to make positive changes like expanding your profits or scope of business. If your assets are enough to meet the business loan interest rate besides the principal, your chances of securing the loan increases.

A sound loan helps you to meet gaps in cash flow and increase your productivity. Since there are several options available, with different terms and rates, only go in for the loan after fully understanding the potential consequences.

How to apply for business loans?

Sometimes small ventures in the world of business require a bit of business funding in order to expand the boundaries and get the plane off the ground. This business loan is also commonly referred to as a commercial loan.  Usually, a bank refrains from giving out loan amounts to start-ups but feel more comfortable in doing so in the case of thriving businesses. The loan amount that a person applies for usually depends on a particular reason. This reason can pertain either to the initial phase or to the growth phase.

The Application Process:

Once you have decided on the loan amount and the bank or organization you want to take the loan from, you need to a compile a documents folder. In case you want quick business loans, you will be better off with a business loan app. Whether you have a start-up business venture or an ongoing one, the credit score is of the utmost importance.  However, in the case of a start-up, if the business is less than three years of age then not only will be the credit score evaluated but also the business credit history.  This is one of the business loan requirements that need to be met.

Sometimes small business ventures need to keep a security deposit in the form of an asset in order for the amount to be finally disbursed. Other eligibility criteria include the client to be at least twenty years of age. His/her business needs to be registered and should have made a profit for three years consecutively. Basically, the turnover needs to be on the positive side.

Interest Rates:

Some banks offer you an interest rate range that varies between 19% and 23% based on the loan requirements. However, some banks also offer fixed loan interest rates.

Documents:

To avail of quick business loans, you need to keep some of these documents handy. These include a detailed company KYC, proof of income tax returns in the last two years, bank statements from last six months that are certified and finally the complete audited amount sheet as well as the profit/loss sheet from last two years.

If you find yourself at a shortage of time, it is advised, that you opt for a mobile app that aids in quick business loans processing and business funding. It also cuts down on time and unnecessary stress that comes with going back and forth to the bank physically.

Two-Wheeler Loan - Benefits And Important Aspects

With the increase in the number of daily commuters, travelling quickly is a challenge. Although buying a bike is a convenient middle ground for quick and comfortable transport, the cost of a bike can potentially burn a hole in your pocket if you have to pay for it in one go. This is where the importance of a bike loan comes in.

Although most people dread taking a loan, a two-wheeler loan is vastly different from your conventional house loans and car loans. It actually benefits you in more than one ways.

Important Aspects of Bike loan

Before we go into the various advantages of a two-wheeler loan, here are the salient features of the loan.

• Banks, as well as non-banking financial companies, provide two-wheeler loans.
• Two-wheeler loans are available directly from dealers if they have a tie-up with the banking institution. You can get added offers and discounts from the dealer along with the loan.
• The interest rates are competitive and vary between 12% and 27%. You have to repay your bike loan by means of equated monthly instalments at this rate over a specified period.
• The tenure of repayment varies from 1 year to 4 years. You are free to choose the period over which you will pay back the money.
• Usually, a lender will pay around 90% of the cost of the bike you intend to buy. You have to pay the outstanding amount. This is known as the margin.
• Eligibility criterions to get a two-wheeler loan includes age, income, occupation, credit score etc. of the buyer. Make sure you meet these to get the loan.
• Bike loans not only cover the cost of the bike but also cover registration cost, cost of accessories and insurance.

Advantages of a Two Wheeler Loan

• Two-wheeler loans have a long tenure, which enables you to pay back your loan without excessive pressure on your finances.
• According to the regulations of the Indian Motor Act, all bike loans come with two-wheeler insurance and accidental cover.  This enables you to save on the premiums of your insurance by wisely choosing your lender.
• Since the lender pays the major portion of the cost of your two-wheeler, you do not have to pay a large amount from your pocket. This allows you to buy a vehicle without significantly disrupting your finances.
• Getting a bike loan is a simple and quick process. This makes two-wheeler loans the best way to own a vehicle.
• Getting a house loan or a car loan requires you to have a high credit score. Proper repayment of your two-wheeler loan helps you to improve your credit score to apply for a house or car loan in the future.
• The instalments of your two-wheeler loan are often less than your daily commuting expenses. A bike loan can actually save your monthly expenses.

Having your own vehicle has become an essential commodity today. Bike loans are the quickest solution to your daily commuting issues. Availing a two-wheeler loan allows you to buy a bike on spot and save time and money. Therefore, it is time you started evaluating your choices and getting yourself the two-wheeler that you always wanted.

A summary on two-wheeler loans

In the current age, having a vehicle of your own, whether it is a four-wheeler or a two-wheeler has become a necessity in order to make daily life easier. Having a vehicle of your own not only cuts down on transport costs but also saves time that you spend on waiting for your bus to come. Although affording a car is still a far-off dream for many people in India, purchasing a two-wheeler seems like a more achievable goal. Moreover, two-wheelers ensure lesser waiting time during long traffic jams. When it comes to the question of purchasing a two-wheeler, opting for a loan option is a viable and easy option.

The Loan Types

Before you apply for bike loan, here is what you should know about. There are mainly two kinds of two-wheeler loan option in India. These include-

1.    Secured Bike Loans- In a secured bike loan, the borrower mainly has to keep an important asset as a security deposit such as their home or land. This loan option offers the possibility of a lower two-wheeler interest rate. The risk rate is relatively higher due to the possibility of the borrower losing out of their asset.

2.     Unsecured Bike Loans- In an unsecured loan application, the two-wheeler interest rate is much higher. Therefore, the down payment for bike loan is higher because you are not declaring an asset as collateral.

The Loan Application

As you begin your loan application, download the two-wheeler loan app which offers easy processing of your application. Applying for a loan online on a website or through your two-wheeler loan app is simple and quick. Which bank you want to take the amount from will be determined after you have researched the market well based on criteria such as the interest rate, charges, EMI and fees. After you are done comparing and found the loan of your choice you can begin gathering documents and details.

However, if you are an old school person and believe that physically dropping by the bank is the best way to get your needs sorted then the process is slightly different. Once at the bank, you will need to ask for a representative who will guide you in the application process throughout. But in order for you to get a designated representative, you may need to wait long hours in the queue. In order for your loan amount to be disbursed, you will need to meet all your formalities as well as meet the minimum eligibility requirements.

There might be various other rules that a client may need to follow in order to apply for bike loan amount. These features, as well as rules, will invariably differ from bank to bank.

All you need to know about short-term education loan

An education loan usually takes care of the finances for your higher studies. It enables you to study without worries of payment of steep fees. With the growing cost of education, especially professional courses, loans for financing education are extremely common. Banks usually keep the education loan interest rate low and affordable for students. You can pay it back after your studies are complete, over a specific tenure.

If you are contemplating higher education or restarting your education, here is all you need to know about a short-term education loan.

Factors Affecting Education Loan Approval
The lenders the following factors before sanctioning an education loan to students-

Your ability to repay the loan- The credit history of the co-borrower must be clean if you want to be able to borrow the required amount of money.

Academic history- Students with a consistent academic record and higher marks tend to have a more promising future with better-paying jobs.

Hence, such students will get education loans easily.

Course- Your college/university and the academic course you want to pursue must have AICTE (All India Council for Technical Education), UGC (University Grants Commission), or government approval. You must also be able to provide a letter of acceptance to the college/university.

Education Loan Interest Rate and Tenure

Short-term loans are generally paid over a time of 2 years to 5 years. The value usually ranges between Rs. 25,000 to Rs. 2,50,000. The education loan interest rate is generally higher than that for long-term loans.

What Should Your Education Loan Cover?

An ideal education loan should cover-

• Tuition Fees
• Accommodation
• Exam Fees
• Library Fees
• Books and Equipment Fees

Documents You Need

• Letter of admission
• A detailed break-up of the costs pertaining to the course
• Completed application form for the loan
• Photographs
• KYC (Know Your Customer) Document
• Mark Sheets/Passing Certificates
• PAN Card of the parent/ guardian and student
• Any identity proof such as Driving Licence, Passport, Aadhar etc.
• Any residential address proof such as Driving Licence, Passport, Telephone bill, Electricity bill etc.
• Student/Co-borrower/ Guarantor's bank statement for the last half year
• IT assessment/IT return of parent/guardian/ other co-borrower of the last 2 years (if applicable)
• Statement of assets and liabilities of parent/guardian/other co-borrower
• Proof of income such as salary slips or Form 16 of parent/guardian/other co-borrower

Benefits of Education Loan

• Section 80E of Income Tax Act promises tax exemptions on the interest of education loans.
• Money is no longer a hurdle in your path to a good education.
• Repayment of education loan on time helps you build a good credit score for the future.

With a sound education loan, which removes your financial concerns, and hard work, there is no stopping you from getting into your dream career and achieving success.

Factors to consider while taking an education loan

All ambitious youngsters around the world these days aspire to have a good education from a reputed institution so that they can pursue a career and live a well-settled life. However, admission to a recognized educational institute these days has become extremely expensive. That is where the benefit of a student education loan comes in. It comes as a boon to deserving candidates and assures the education that they rightfully deserve.

Important factors to consider for an education loan-

1. Choice of course

Before you apply for a student education loan, it is important that you find the appropriate course for yourself. This is the first most important step that will later determine the kind of job opportunities you can apply for after completing your course. The choice of job will be further essential in determining how much money you earn which will be required to pay back the loan amount that you borrow. Also, when you decide upon the course, ensure to sit down and do a comparative study with other universities from different countries. Make a note of the costs that will be spent on food and lodging, cost of daily travel, etc. This breakdown of the expenses and then in the end summation of the total costs will help you to figure out exactly how much money you need as the loan amount.

2. Future prospects-

Before you get your education loan procedure in processing mode, spend some quality time researching about the career prospects of the course you are deciding to study. Also, decide upon some backup options in case you do not get the job of your desire. The backup option is extremely important because you need to repay your amount and in the initial years of your job, your salary may not be enough to sustain. In such a situation you need to know if your family members are willing to sponsor your partial student education loan amount.

3. The rate of interest-

When you come down finally to the question of the loan amount spend some time researching about the procedure such as how to get education loan of your choice, what are the criteria that need to be met, what documents you need to get ready and so on. With every loan application comes the question of interest rates. Although the interest rate on an education loan is significantly lower as compared to that of a personal loan, the situation has changed in the last few years with the rise in demand of education loans. Last and finally, every education loan procedure becomes a cakewalk affair if you already have a good credit history.

So, above are very crucial factors that you need to keep in mind before taking your education loan amount. For easier application and processing of your loan, you can also download the education loan app.

Gold Loan Vs. Loan Against Property- Which Is Better

Loans are a financial instrument that saves you from financial crunch situations and fulfils your many needs. Getting a secured loan against gold is often the most sought-after method to escape financial troubles. This is because the loan against property and gold loan interest rate is much lower than unsecured loans. Loan against property or gold can also allow you to get sanctions for a larger amount.

However, a large number of people have a hard time deciding which to pledge- gold or property. To figure this out, you need to know what advantages one has over the other.

Gold Loan

Most Indian households own a fair share of gold jewellery. This can be used as collateral to secure a gold loan. The advantages of gold loans over property loan include-

• The evaluation process of gold jewellery is fast and done by an in-house evaluator.
• Processing time is quicker for gold loans. They are therefore more suitable for emergencies.
• Gold loan schemes are very flexible in terms of interest rate and tenure. You can choose to pay the gold loan interest rate during the tenure and pay the principal at the end of that period.
• You only need an identity proof and PAN card for getting a gold loan.
• You do not have to pay a pre-payment penalty in case you want to pay off your loan earlier than the stipulated time.
• In case you are unable to repay your loan, you only lose your jewellery.

The downsides of a gold loan are-

• It does not add to your credit rating.
• The gold loan interest rate fluctuates with the market price of gold.
• Lower loan-to-value ratio, which means you have to pledge gold jewellery that is worth much more than the cash you require.

Property Loan

Loan against property is sanctioned against a residential property or a commercial property that you own. Although you can continue to use the property, you cannot sell or transfer the ownership before you repay the loan. The advantages of pledging property over gold are-

• The interest rate for property loan is much lower than a gold loan.
• You can get loans of higher value.
• The tenure of loan against property is much longer.
• It adds to your credit score.
However, property loans have their own share of difficulties that include-
• Longer evaluation and processing period. It takes weeks before the evaluation of your property is complete and you can get the loan.
• You have to submit the property documents to the lender.
• In case there are multiple owners of a property, all the owners must sign as co-applicants.
• Getting a loan against property requires a large number of documents such as identity proof, address proof, property documents, PAN Card, and proof of income.
• Pre-payment penalty applies to property loans.
• If you are unable to repay the loan, the lender will seize your property.

Before you jump to pledge gold or property, evaluate how soon you need the funds and how soon you would be able to repay the amount. It is better to take a gold loan for smaller amounts that do not require much time to repay. It gives you a quick solution to your crisis with low risks. However, if you need a higher amount, loan against property is the best option for you.