There are times when a business owner is in need of some funds for business and so the next decision is taking a loan. But if you are thinking of taking a loan for your business, it is important to first compare loans and then go for the best one.
There are many lenders and loan products available in the market. The type of loan you go for will depend on the need. Every lender has his own set of procedures and criteria. To reach a decision about which loan to go for, there are some important factors to consider.
Why comparing is important?
Comparing the loan options available is important for every business owner so that the best option is chosen and the loan taken serves the purpose. If you do not do your research, you may get involved in a debt-trap or it may affect the business in some way.
How do you compare loans?
Eligibility of the applicant
Every lender has different eligibility criteria and it is difficult to meet every lender’s criteria, so when you go for the comparison, you will have to check the eligibility criteria of every lender. This will help you in shortlisting the lenders whose eligibility criteria you meet so that your loan application is not rejected.
Documents requirement of every lender can also be different, some may ask for a few documents whereas the others might ask for more documents, and a few might only need the financial and KYC documents. You will have to choose the lender who asks for the documents you can give, but it is generally feasible that you go for a lender who provides loans with minimal documentation.
Other terms and conditions
Some of the lenders have a strict set of terms and conditions and it is difficult to get through them. Therefore, a comparison of the financial products based on the terms and conditions they are offered is very important.
Two types of loans are there, secured loans and unsecured loans. Loans with security are generally offered by banks and unsecured loans mostly are offered by NBFCs.So you have to compare and decide which loan you can go for.
Annual percentage rate or APR
Annual percentage rate is the annual cost of the business loan. Business owners think that only interest rate matters but few other charges can also increase/decrease the cost of the loan. It is therefore ideal to choose a product with low APR instead of one with a low-interest rate.
If you need an unsecured small business loan, get in touch with Gromor Finance. The loan application process is simple, there is less documentation, and the loan disbursal is within 3 days or less!