5 Must-Know Facts Before Taking a Personal Loan for Business
Written By: Mobin
Personal loans get approved faster than business loans—ideal for emergencies! No collateral needed, but interest rates are higher. Perfect for urgent business needs.
Quick Relief
Unlike business loans, personal loans require no property guarantee. Great for startups, but high interest & strict repayment terms demand careful planning.
No Collateral
Most banks cap personal loans at ₹10 lakh—insufficient for large expansions. Assess your needs and repayment capacity before borrowing to avoid shortfalls.
Loan Limits
Timely EMIs boost your credit score, but defaults damage it severely. Only borrow if confident about repayment to avoid future loan rejections.
Credit Impact
Tax exemption applies ONLY if you prove the loan was invested in business. Maintain proper docs & consult a CA to claim deductions correctly.
Tax Benefits
Compare interest rates, processing fees & hidden charges across banks. Opt for longer tenures to reduce EMIs but beware of higher total interest.
Key Checks
Borrow only for essentials, maintain a 750+ credit score, and never miss EMIs. Plan repayments wisely to avoid penalties & financial stress.