Know About Personal Loan, Interest Rate and Eligibility Criteria - Financing Pedia

If you are a small business owner and looking to explore diverse lending possibilities for your venture, it is necessary to consider both secured and unsecured loans. However, you need to ascertain and evaluate the differences between secure and unsecured business loans for simplifying selections, further.

In case you are interested in getting a business loan in India, consider the following evaluative metrics for differentiating between the types of loans:

1. Interest Rates

Secured business loans are charged at lower interest rates, owing to the collateral-centric approach. Therefore, if you have a new property to account for, you can always mortgage the same to get hold of a secured business loan. Unsecured credit lines attract higher interest rates and rely heavily on the credit score of your organization.

2. Ease of Approval

In case you are looking for quicker approvals, it is advisable to opt for secured business loans. Even if your organization doesn’t have a prior credit history, collateral-specific loans are characterized by quicker approvals with minimal documentation. Unsecured loans, however, are entirely document-centric and hard to get approved for.

3. Speed of Loan Disbursement

Unsecured loans aren’t mortgage dependent and, therefore, can be attributed to faster disbursements. In comparison, lenders offering secured loans take every aspect of property and asset valuation into consideration, which slows down the loan disbursement process, despite them levying a lower business loan interest rate.

Therefore, if you have unused assets to spare, secured loans are better choices, in terms of long-term affordability.

Additional Read: Follow These Easy Steps to Get A MSME Loan