What Is The Significance Of Unsecured Business Loans For Businesses?

The culture of credit is not new at all in our country. After the establishment of banks, the credit market becomes quite regulated. So let’s discuss some interesting facts about different kinds of loans. There are two types of loans available in India secured and unsecured.

Secured Loan

The secured loan includes home loan, auto loan, equity loan, an equity line of credit, etc. These kinds of loans have numerous benefits like low-interest rates, easy EMI options, etc. Secured loans are usually long term loans and you have to present some asset as collateral.

Unsecured Loans

The list of unsecured loan is very vast it includes- credit cards, personal loans, student loans, payday loans, overdrafts etc. There are numerous risks associated with these loans because of this they are quite expensive as compared to secured loans and have very high interest rates. But this kind of loans are very easy to get and you don’t have to bother much about the paper works.

Being an entrepreneur you can go for secured as well as unsecured loan according to, need of your business and available resources. If you talk about interest rates then no doubt that with secured loans you will find cheaper interest rates in almost all the banks and financial institutes. But for business, it is always not possible to go for secured loans as requires very long processing time and comprehensive paperwork. Hence in the corporate world, you have to go for unsecured loans also, unsecured business loans are considered as the best to meet the working capital requirements of the business. In our country also the unsecured business loans are quite prevalent; if we look at the current trend of unsecured business loans in India then we will come to know that several banks and NBFC like Indifi are coming up which special unsecured loans in India to fulfill day to day credit requirements of the Corporate and entrepreneurs.

In this particular article, we are going to discuss some scenarios in which unsecured business loan becomes essential.

  1. One of the major benefits of the unsecured business loan is that they are collateral free credit. If you want to get money from banks without bothering about collateral or mortgage then the unsecured business loan is the best option.
  2.  The unsecured loans in India are quite in trend these days. There are several financial Institutions like Indifi who are coming up with different varieties of unsecured loan products like a term loan, business line of credit, business credit card or overdraft. Now several well-known financial institutes are proving the facilities of unsecured loans in India.
  3.  Another advantage of unsecured business loan is that the application process is very simple and you don’t have to wait for several days to get your loan sanctioned.
  4.   If you closely observe the trends of unsecured loans in India then you will come to know that one of the most important features of unsecured loan is that it has a very fast disbursement process.
  5. The biggest drawback of secured loans may be that they come up with the repayment period of years, as there is a particular structure of every kind of loan. But if you want money for a short period then go for unsecured loans as they also provide the option of short term repayment.
  6. The banks and Financial Institutions like Indifi are coming up with easy repayment of unsecured business loan and if you closely observe the trends of the market then you will come to know that financial institutions are actually promoting for unsecured loans and coming up with very flexible repayment options for the merchants.
  7. If you are going to start a new project or establish yourself as an entrepreneur then instead of going to, venture capitalist or angel investors go for an unsecured business loan. In such type of borrowing, you don’t have to share ownership.

In this particular article, we share some very informative details of the financial world. Keep visiting our website for other interesting facts about the new trends of the credit market of India.