How Do Credit Card Companies Make Money?

Credit cards have gained much popularity in India over the last few years. Public sector banks as well as private banking institutions have come forward to launch a host of credit cards suiting customers with different types of needs. HDFC Credit Cards and SBI Card are the two companies with the largest market share. While banks are ready to offer you with a small loan in the form of credit cards, have you ever wondered how these banking institutions make money from these ventures?

The three main ways how card issuers make money is through the annual fee of the card, interest charged on late payment, penalties on skipping EMIs, etc. At the same time, they also earn from the businesses that accept these cards. Businesses are required to pay transaction fees to the banks which also makes up for significant earning of the card issuer banks.

But before we dig deeper into how they make money, let us first understand the term ‘Credit Card Companies’. It is easy to get confused between credit card issuers and credit card networks. An issuer is the bank or financial institution from which you take the card. You are taking a loan from the card issuer and paying back to them. A credit card issuing company is usually a bank. On the other hand, credit card network refers to companies that process the transaction. Currently, there are three main networks in India- VISA, Master Card and RuPay. Apart from these, American Express and Discover cards can also be found.

So, when you make a transaction with your credit card, your money moves electronically from your bank through the network to the merchant’s bank.

How do credit card companies make money?

As mentioned above, your bank makes money majorly from you and also from the merchants where you use the card issued by the bank to make the payment. Banks or financial institutions make money in the form of-

Fees

Banks charge different types of fees from their cardholders- some fees are to be paid by everyone whereas other types of fees are levied on condition. Let us talk about these fees and charges-

Annual Fees- You have to pay annual fees towards your credit card, especially when you are an elite cardholder and enjoy higher benefits than normal users. This is to be paid by all users. However, some banks may set a condition of spend based annual fee reversal scheme.
Cash Advance Fees- When you withdraw money from an ATM using your credit card, the bank charges a minimal fee for it which is usually correlated to the amount you withdraw. This is also included in the card issuer’s earnings.
Late Fees- Your card issuer charges fees from you if you delay your EMI payments. Banks make more money from late payers in the form of late fees.
Balance Transfer Fees- When you transfer outstanding balance from one card to another, the bank charges fees from you which again becomes its earnings.
Interest
The bank or financial institution has just gifted you a credit line. You have to pay the interest for the loan that is offered to you in the form of credit card. This interest cost adds to your expenses and is a method of earning for the banks. Interest on credit card is charged on daily basis for as long as the amount stands outstanding in your account. This is why experts always advise you to pay the total outstanding amount in full every month because interest will accrue on any amount that stands unpaid.

Let us understand this with the help of an example. Suppose the billing date is on 4th of every month and payment due date falls on 29th of every month. APR = 24%

10th March- Apparel Shopping- Rs. 5,000
13th March- Bill Payment- Rs. 2,000
19th March- Gadget Purchase (converted into 6 month EMI)- Rs. 12,000
22nd March- Dining Bill- Rs. 1,000
Now considering that the person does not have any outstanding amount from the previous bill, he will have to pay Rs. (5,000 + 1,000 + 2,000 +2,000) = Rs. 10,000.
This will be the total amount due on 29th March. Now if the person chooses to pay only Rs. 6,000, the remaining Rs. 4,000 will accrue interest for each day until the amount is paid in full. Considering that the user again pays Rs. 2,000 on the 10th of April, let us see how interest cost works out-

Interest = (outstanding amount x 2 percent per month x 12 months)* (number of days)365

In this case, the total interest charged would be Rs. 52.60 which is a total for Rs. 4,000 that lies outstanding for 11 days and Rs. 2,000 that lies outstanding for 18 days until the next payment. This is the reason why those who only pay minimum amount due tend to fall into debt burden sooner. Cardholders should also note that when an amount is outstanding in your statement, the new purchases that you make are not eligible for the interest free period. This is why interest charge is the easiest way how banks make money out of your credit card.

Interchange Fee from the Merchant

When you use your card at a merchant terminal, the merchant also pays a percentage of the amount to the bank as processing fees. This will also be added on to the bank’s earnings. It usually ranges between 1 to 3 percent of the transaction value but may differ from merchant to merchant.

How to save yourself from paying too much to the bank?

Savvy customers plan their transactions and payments in a way that they have to pay the least amount to the bank. These are the habits you can adopt to cut your costs-

Pay your entire outstanding balance every month; just pay the minimum amount due is not a good practice.
Set alerts for your payment due dates to avoid missed payments which entail late fees.
Create an emergency fund to replace costlier options like cash advances from credit card.
Choose low annual fee or free credit cards and even if you select a card with high annual fee, make sure that the rewards are worth it.

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Your Financial Checklist of Things to Do When You Retire

You’ve finally made it to retirement age! Congratulations! Now it’s time to take a few smart financial steps so you can relax and enjoy your new-found freedom!

Your financial checklist of things to do when you retire

Those early days after retirement can be much more complicated than you might have thought. You had the impression that the day you handed back the keys to the office would be filled with carefree exhilaration, but it’s crucial to have a financial plan to make sure your later years are going to be as enjoyable as you always wished them to be.

Celebrate!

Of course, you deserve to celebrate a little. Perhaps throw a party for family and friends and go away for a week or two’s vacation to do whatever you want.

But when you’ve finished with all that, here are a few things you need to do, if you didn’t do them already before your last day at work.

Check your pension and make sure you have all your documents in order

Your steady paychecks have finished so your main source of income is going to be your pension payment every month. Make sure you know exactly how much you’re going to receive every month because that’s all there is and that you have all those important documents well organised. Any lump sums you’ve received on retiring should be stashed away and invested and not just thrown into the current account because they have a tendency to disappear more quickly than you can imagine! More about how to invest this money later on.

Find out about all those freebies and discounts

Depending on which country you live in, there may be loads of free things or discounts you can take advantage of. These may include public transport, cinema tickets, restaurant meals, museum entrance fees etc etc. Always ask before you pay anywhere and always have your ID with you so you can prove your age. Find out about certain days and times when these discounts apply and make the most of them!

Check your tax situation

In most countries, pensions are taxable income. Talk to a good tax advisor and understand how much tax you’re going to have to pay so you don’t get a nasty surprise at the end of the tax year.

Check your health insurance and social security coverage

This is, unfortunately, going to become increasingly important as you get older. If you have a good public health system in your country this might be enough, but if you need private health insurance get a good deal now while you’re still healthy and don’t wait until you have problems when it’ll cost you a lot more.

Mortgage

Hopefully, you’ve paid your mortgage off a long time ago, but if you still have a mortgage to pay every month, there’s a temptation to pay it all off when you retire. However, mortgages are generally the cheapest loan you have and the interest you pay is probably deductible against your pension income, so it might be an idea to keep your mortgage going to reduce your taxes. Check all this out with your tax advisor before doing anything rash.

Make a budget

If you’ve received a lump sum, it’s easy to think you’re suddenly rich but that money is going to have to last you (hopefully) a long time. Make a budget based on your regular monthly pension income and even try to save a bit out of that every month so you can afford a few vacations from time to time. Don’t use your savings for your monthly expenses. Bear in mind that now you have more time on your hands you might find that your monthly expenditure goes up instead of down. It’s easy to get into a routine of going out more, eating out more and just generally spending more so make a budget and stick to it.

Investments

This is a much talked-about subject. Some people swear by investing in low-risk bonds which might pay about 3-4% a year before tax, or in dividend-oriented shares which might pay about the same. Other people say that, just because you’ve retired, it doesn’t mean you shouldn’t invest in growth shares which might not pay a dividend but which might go up nicely. After all, most people’s retirement horizon could be 20-30 years or more. This is a personal decision but it might be an idea to have a blend of investments. It can also be an idea to have a rental property although as you get older you might not have the energy or appetite for all the management that this entails.

Don’t give large amounts of money to your children

If you’re in your sixties, the chances are that your children are going through the most stressful part of their lives. They probably have a large mortgage, young children, their careers are just getting started and they’re probably short of money. You may be sitting on a tidy amount of money in the bank and there’s a big temptation to be generous. They might even ask you for money. Be very careful in this respect because when you get short are they really going to help you out? The biggest favour you can do them is to be financially independent yourself so you won’t rely on them in the future.

Make your home retirement-friendly

Think ahead and consider down-sizing to save on your monthly expenses. Perhaps move to a house with fewer stairs or to an area where you don’t need a car. There’s no obligation to keep running the large family home for the few occasions when everyone comes to stay and where you’re still storing your children’s junk that’s been in the attic for the last 20 years. If you’re going to travel more, it’s probably better to live in an apartment which will be more secure while you’re away and the costs will be lower and more predictable every month.

Start a small business

If you’re in good health, there’s no reason you can’t start your own small business. This could be good fun, it’ll keep you busy and it’ll bring in some extra income which will always be useful.

Take a look at our article: Starting a home based business for loads of ideas that don’t require you to put your nest egg at risk. Just make sure you choose something you enjoy!

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Russian Roulette: A Dangerous Financial Game

If I had a dollar for every time my grandmother told me to make sure you are on the business, make sure your name is on the house, I would be sitting on a pile of cash. I’d tell her, of course, my name is on the business, we filed the paperwork 25 years ago. Afterall we started the business together with a loan from her. I was an owner of the business years ago, but he reincorporated. Although I signed new paperwork that was not the paperwork that was submitted. Despite a tumultuous marriage, I never checked. Instead, I blindly believed in my partner or rather I buried my head in the sand. We did not have those discussions, they led to loud arguments and fights and who wants to invite that.

Financial Responsibility is Your Responsibility

When you embark on your wedded journey, make sure you have all of the hard discussions no matter how uncomfortable they may be. Discussing finances, ensuring your name is on a home you purchase together, a business you start together, banking accounts, etc… is a sign of trust rather than distrust. If you can have difficult conversations without responses like “don’t you trust me?”, or “I’m better with money, just trust me”, than your chance of a successful marriage is increased. One partner controlling the purse strings is often a sign of financial abuse.

Your Accountant should be on Speed Dial

Sometimes those little hairs on the back of my neck would tingle and I would insist on accompanying my spouse to our accountants. The conversation would be directed by my ex and our accountant. My fears would stop screaming “something’s not right” and just silently nag. I’d ask about being listed on the business as an owner and would be assured yes and don’t worry this is a 50/50 state. Let me assure you that even though the law may state that, the one with the money has the power. Your accountant works for you – verse yourself with what questions to ask, get a second opinion, understand your finances. Do not play Russian Roulette with your life. Blame and ignorance do not pay the bills and debt collectors do not care.

Your thriving business is now near bankruptcy

Our small business of 25 years had provided us with a wonderful lifestyle. We had a nice little nest egg, the ability to pay for our children’s college education, parcel of a small financial gift to them upon graduation. We achieved the American Dream and then the nightmare began. Suddenly, divorce was imminent and our thriving business was on the verge of bankruptcy. Everything we had worked so hard for was gone or so it seemed. If you suspect financial hanky-panky, hire a financial advisor who specializes in forensic accounting right away. Once the money is gone, chances are it is not coming back but you need to preserve what remains. If I had just had the hard talks about money, taken a more educated and active role when it came to our finances I wouldn’t have played Russian Roulette. College tuition would have been paid, and we both would have split the nest egg, 50/50.

What is Financial Abuse?

Last Thoughts

Before you marry, make sure you have the difficult discussion with your partner. If you fear yourself shying away from a topic to avoid an argument or fight, consider it a warning sign.
Check things out for yourself. You are smart and just as capable. It’s easy to let someone else do it but this is your life. Fiduciary trust does not mean you play Russian Roulette and gamble your money and life away.
Be active when it comes to your finances. If your tax return is complicated, then learn how to understand it. Take it to your own trusted advisor.
A solid partnership is built on trust, not blind trust, but trust that you can have open honest discussions. All topics should be open for discussions.
Ignorance is not an excuse and does not pay your bills.
Take control of your finances or your finances will take control of you.

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5 Situations When Personal Loans Can Save the Day

With a rock solid credit history, you can successfully apply for personal loans and expect a swift processing of the same for meeting temporary financial glitch in life. Personal loans are all-purpose loans that can be availed as secured or unsecured loans. These can be used for multiple reasons and the purpose need not be disclosed ever to the lender.

The interest rate of loan depends on the tenure and credit score of the borrower. These can be drawn for a few months to several years as per your requirement.

5 situations when you can use personal loans as a smart financial move:

When you have immediate cash needs: It is practical to use short-term personal loans to bridge the shortage of funds in your life. You can use the funds to support any of the sudden cash emergencies like medical expenses, home repair or funding a foreign trip. The purpose of loan doesn’t affect its interest rate, however your income and duration of loan does. All you need here in a planning stage is to have a strong back up plan for repaying the loan. The repayment will improve your credit score and add to your future worth at the same time.
To avoid bad credit situation: In case you have lost a job or face a sudden spurt of personal expenses such as a wedding or some other expense in your life, you can take recourse on personal loans. Bad credit is a situation you should always avoid. If you have shortage of funds, rather than missing a loan repayment you can borrow some funds. The idea is to not let the score fall for temporary financial challenges.
Consolidate multiple payments: When you have multiple payments to be made every month, it is better to simplify the process by consolidating the loan into one personal loan. By consolidating loans, you just have to pay a single repayment and that will pay for other loans. Availing short-term loans for bad credit is a practical means to mend mounting debts and save a financial mess.
Additional funding for students: Being a student it is not always easy to keep a track on your expenses. Sometimes you need funds for reasons that your education loan misses to pay for. Herein you can apply for short-term loans for students as these are readily available. The short-term loan can also be used as a right way for building a good history.
Business funding: Every new start-up or a business entity needs positive inflows. You need to maintain adequate supply of funds for maintaining sound terms with your suppliers and business associates. The short-term personal loans can be used as business loans to keep the flexibility of operations in your business.
In all of the above cases, personal loans can be used to better manage your finances. However it is prudent that you carefully read terms and conditions of a loan agreement and do not sign a very expensive loan. In case you find yourself unable to make a mind on the loan terms, you should contact a loan broker for a financial advice. He would guide you on the ways to manage your funds and keep your credit score healthy.

For more information about personal loans, you can visit Best Short Term Loans online.

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All You Need To Know About Personal Loans

Loans are of several types. It can be classified according to the needs of the person. Suppose, if one wants a loan for his/her home, he/she should take a home loan. If the person needs money to fulfill the educational needs he/she shall be allowed the educational loan. Other types of loans are personal loan, payday loan, etc. However, when one is considering to take a loan he /she should keep in mind that the interest rates for all the types of loans do differ. In this article we shall be dealing with the personal loan and will try to find out how one can get a loan.

A personal loan is something that you might need at any moment for buying anything of your choice. This can be a television, a fridge or even a designer dress that you have come across in the shop. This can be the medical expenses that crops up immediately without any notice. Anything and everything can fit into the personal loan bill.

To apply for a loan one needs to have a good credit. This will make the loan approval process quicker. If one is having a bad credit score then the chances of getting a loan are much less. So, when you apply for a loan make sure you have a clean credit report.

A bank would take time to approve for a loan as they check all details before finally saying you “Yes”. If you want a loan fast you can apply to those financing institutions that offer loans quickly. The crucial point of choosing these organizations over the banks is that they might charge high interest rates, although all the some are an exception in this case. And of course it is better as the process is fast and hassle free when you are really in need of money.

If you are applying for the loans please be sure to go through the terms and conditions of the loans. This will make sure that you are aware of what you are agreeing to pay.

What are the things you need to be careful about?

Be careful about the repayment terms. We advise you not to go for long term loans. There are certain companies which charge hidden amounts and you will never know what you are paying for. So, make sure that you do not fall into their trap. Always take a bill when you pay them so that you have a proof of the money you have paid.

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Different Things You Can Do With a Personal Loan

Since the beginning of the 20th century, the demand for loans has witnessed a rapid growth year on year. The increase of lenders in the market is a huge contributor for this growth. The customer today is smart and the advancement in the digital industry has helped the average customer to be well read and informed.

Earlier to avail a personal loan, the customer would run to the lender with the lowest rate of interest. Today, the scenario has changed drastically. Banks entertain customers who have a good credit score and provide them with better deals and offers on the loans taken by them. Hence, an individual would need to always keep his/her financial profile strong.

How does a personal loan fit into this equation?

A personal loan is taken by an individual to fulfill any short-term obligations which need their immediate attention. You can also avail of this loan for any medical or general emergency. Tuition fees, credit card bills, purchase of an expensive gadget, travelling to new places etc. These are the different things you can do with a personal loan. But, there is one more use of this loan and that use is to strengthen your financial profile.

Yes, you can improve your credit score and thereby strengthen your financial profile by availing a personal loan and repaying it on time without any default. Let’s take a hypothetical example;

Johnny Kane is a married man living with his wife and kid in a rented apartment. He wishes to purchase an apartment of his own in a couple of years which will be near to the kid’s school and his workplace. While he checks for possible home loans from different lenders, he realizes that only because his credit score is low, he is getting a home loan at a higher rate. Johnny then decides to do something about it.

He finds out that his credit score is weak and hence no bank can vouch for his credibility. Hence if he wants a lower rate of interest on any loan, he will need to improve his credit score. Johnny applies for a personal loan with a bank for a period of 2 years. The rate of interest is high and the loan amount is 1,00,000 rupees. Johnny realized that the benefits of repaying off this loan without any defaults will improve his credit score. He pays off the loan without any defaults. Couple of years later when he applies for a home loan, he gets a better rate of interest than before only because his credit score now has improved and his financial profile is strong.

This is how you can use a personal loan to improve your financial profile. Banks offer their best deals and offers to the customers who have a good credit score as it showcases your ability to repay off the loan without any possibility of defaulting.

There are many uses of a personal loan. Using them effectively helps you strengthen your financial position. Although it is wise to be cautious while deciding to avail a personal loan. Hence, connect with Ruloans.
Ruloans is a loan distributor who has over a decade of experience in the loan industry. Our mantra is to help our customers to borrow right.Using our expertise in this field, we help you avail a personal loan from your choice of lender.

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Home Improvement Loan or Personal Loan

Personal Loan or Home Improvement Loan? That is the question.

We love decorating our houses.

And there are phases in our lives when maybe we’ve spent too much time watching Food Food or TLC and thus have built castles in the air of visions of turning our kitchen into a chef’s paradise. Or perhaps our master bath is just one shower away from a disaster. For we really do love Italian tiles on our bathrooms.

And if so, then cheers, you’re not alone. Recently, the Joint Center of Housing Studies for Harvard University has investigated and reported that the home improvement industry should continue post record-level spending in 2016. For many people, this means borrowing money to pay for the well planned home improvements and home decorating schemes.

Now, one is ought to face a tough and difficult and perhaps hypothetical question.

So, which home improvement loan is right for you?

Many homeowners and homemakers look to tap the equity in their homes. But home equity loans or home equity lines of credit may not be possible or very practical for some borrowers. In that case, one should consider using a personal loan.

While it is known that one can use a personal loan for a variety of reasons, there are a few reasons why a personal loan can have advantages over home equity loans when it comes to a renovation loan, to be specific.

The application process for a personal loan is usually quite simple and quite straightforward. Your own financial situation-for example, your credit history and earning power; this is often the main deciding factor for whether or not you will be able to get a loan, for how much, and if so, at what interest rate. Some personal loans even boast of having no origination fees.

However, home equity loans or home improvement loans on the other hand, are akin to applying for a mortgage (in fact, home equity loans are sometimes called second mortgages). How much you can borrow depends on several factors, including the value of your home. Because you can only borrow against the equity you already have (i.e. the difference between your home’s value and your mortgage), you may have to arrange – and pay for – a home appraisal.

Let’s now see this case in the case of a home improvement loan. With a home equity loan or a home improvement loan, you can only borrow against the equity you have – which, as a new homeowner, is probably not much. You maybe have not had enough time to chip away at your mortgage and the market has not yet elevated your home’s price. A personal loan lets you start home improvements regardless of how much equity you have. So, that is one benefit of availing a Home Improvement Loan.

With a home equity loan, you use your home as collateral, which means an inability to repay could result in your home going into foreclosure. While failing to pay your personal loan carries its own risks (like ruining your credit and credit score), it is not tied directly to the roof over your head,like a gun on your head. Therefore, it is better and safer to avail of a personal loan.

So, if we were to decide, which one is better and safer and more suitable?

Personal loans may not be right for every borrower looking for a home improvement loan. For example, if you have significant equity in your home and are looking to borrow a large amount, you might be able to save money with lower interest rates on a home equity loan. Also, interest payments on home equity loans and lines of credit can be tax deductible under certain circumstances; but that is clearly not the case with personal loans.

On the other hand, personal loans can make sense for these types of customers:-

• Recent home purchasers.

• Smaller home improvement loans (e.g., bathroom or kitchen as opposed to full remodel)

• Borrowers in lower home value markets (if your home value has barely budged since you moved in, you may not have much equity to draw on for a home equity loan).

• For those who value ease and speed.

• Borrowers with great credit and cash flow.

While home equity loans and lines of credit are a good source of home improvement money if you have already built up equity in your home, a personal loan may be a better alternative if you are, say, a new homeowner and need to take care of a few updates to make your new home, just right and perfect.

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Perks of Getting Personal Loans Online

Personal loans are the prime way to get some immediate money at hand. There are many lending institutions and financiers who will provide with immediate financial assistance to genuine and potential loan applicants. These lenders provide such gratifying terms that the borrower is obligated to avail a loan with them. That said, these loans are the most convenient methods to avail a quick loan especially during emergencies. Keeping in mind the urgent needs, most lenders provide personal loans online options too so that it is more convenient for the borrower.

Personal Loans Online Options:

Most of the finance lenders provide simple online tools on their websites for availing a personal loan. You may use these online options either to apply for a loan or for exploring the details for getting a much-needed loan. These online options on the lender’s website can be used to check and compare the interest rates, loan processing fees, and other charges which the lenders might charge you for availing a loan with them. A borrower can avail either an installment loan or an instant payday loans via online application process, although most of the times it is an instant payday loans for short-term purposes.

Here are a few benefits which a borrower can seek while getting an online loan -

1. It is convenient -

Imagine a sequence in which you are filing an online loan application while sitting on your cozy bedside and then, another scene, where you are running out in the hot sun and waiting outside the lender’s room to file a loan application. Which do you think is more convenient? Undoubtedly the online option!

2. Save A Few Pennies -

Most P2P submitted loan applications are levied with other additional fees which may increase the repayment amount or the EMIs, depending on the loan type you are availing. However, with an online application, you will not have these additional fees which will help you save your cost.

3. EMI and Other Calculators -

There will be options for checking and calculating the interest rates and the respective EMIs or the loan repayment amounts. The digital calculation tool will solve your doubts regarding the complex calculations for the EMI amount with the interest rates, etc.

4. Information Accessibility -

All the information required to know about a loan process and other related details will be displayed on the website by the creditors. There will be all the data and cue related to the APR, the eligibility criteria, the repayment options, processing fees and other additional fees if charged, documents needed, and other small detail regarding the loans will be provided on the online portal.

5. Least Possible Documentation -

Unlike the banks, personal loans do not need any elaborate verification and paperwork to be done. These lenders do not consider the credit scores and will provide loans for bad credit without any collateral. The only needed documents will be to prove your age, residency, income, employment, and checking account details.

By providing the flexibility and luxury of applying for a loan from the comfort of their home or from their work cubicle, these personal loans online option has become a sought-after option amongst the loan seekers.

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How A Personal Microloan Can Help Your Business

People utilize personal loans for a number of reasons, such as consolidating debts, paying for a medical debt or for costly auto repairs.

But there is something else the average consumer needs to know: a personal loan can be used for your small business.

Despite the label, a personal loan could just be what is needed to maintain your business. The personal microloan can be used for certain expenses such as:

• Inventory
• Equipment (things like printers, tools, copiers, manufacturing equipment, cubicles, etc.)
• Office space (either to purchase or rent)
• Marketing and advertising (digital, promotions, print, etc.)

For any type of business expense, if your business does not have the extra capital but needs cash to grow, then a personal microloan is a feasible option.

Small Business Loan vs. Personal Loan

Most small businesses that require necessary funds in order to grow their business typically search for a small business loan. This makes sense as a small business loan is generally beneficial to the small business owner.

In certain situations, the small business loan assists the business owner to purchase large ticket items, such equipment, inventory, or raw materials. However, just because the small business loan is the industry standard, it does not always make it the correct solution.

The biggest problem with a small business loan is the stringent requirements. Not only does this hold true with the eligibility requirements, but it also comes into play during the application process. Here are some of the biggest challenges:

• Lengthy application process that can eat up hours of valuable time
• Documentation requirements, such as providing a business plan, tax returns, references, and financial data
• It can take a long time to receive the funds (even after you get an approval), as the entire process can take up to 90 days
• There are as many as seven different types of small business loans… choosing the right one for you could take some time

Although it’s common to initially assume that a small business loan is the best choice, you may find that these requirements are difficult to meet or will take longer than you want to get your business moving.

Is a Personal Loan Application Process Any Better?

The short answer is that an application and decision regarding that application can be made by the company offering the personal loan within one day.

With a personal loan, you don’t have to jump through nearly as many hoops. Instead, its’ much easier to acquire a loan in a timely manner (and without the hassles mentioned above).

Some of the primary benefits of a personal loan for business use – especially compared to a small business loan – include:

• Simplified application process that can be started online or over the phone within a matter of minutes
• Fewer documentation requirements
• Same day decision (not always but most of the time)
• Fewer complications, with the main decisions being the repayment schedule and amount to borrow

The simplicity and convenience alone is reason enough to learn more about using a personal loan for your business.

Making a Final Decision

Now that you understand that a personal loan can be utilized for your business, you need to decide if this is the right financial solution for your company at the present time.
As you compare this option to a small business loan, ask and answer the following questions:
• How do you plan on using the funds?
• Do you need the money in the immediate future, or can you afford to wait?
• How much money do you need to borrow at the present time?
• Have you collected all the information you need for the application?
• Which type of loan is most affordable over the long run?

By answering these questions, while also consulting with a lender for each type of loan, you’ll find yourself in a position to make an informed and confident decision.

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