Decision Time: Personal Loans vs. Bank Loans
Businesses make significant contributions to the economic growth of a country. To facilitate the businesses, a lot of financing is required. Business can also draw finances from personal savings and from borrowing from loved ones. Other resources are borrowing from banks and other financial institutions, or investors’ funds. The banking sector hence contributes to any business and network growth of countries.
The Southeast Asia is a fast growing region, more so of wealth and significant revenue gain. These factors contribute to the economy of the entire region. Another key factor in their growth is the level of financing because it draws a lot of attention to the financing services offered to businesses by the banking sector.
Unsecured Personal loans vs. Bank Loans
Individuals get unsecured foreigner loans for different reasons. They can use it to make a down payment in a purchase agreement. Loans are also used to renovate a house or a business premise, finance a vacation or pay bills. The amount borrowed may not be as much thus, it’s payable after a short period. Therefore, it’s a quick solution to escape financial difficulty.
On the other hand, a bank loan may be an excellent way to finance your business. The loan could be a form of capital financing. Hence it’s a large sum of money payable after a longer period. It could be ten years, not forgetting its tax advantage in your business. The bank loan has allocated interest rates, which could be much lower than that of a short-term loan. The repayments are also often made which reduces one’s liability each passing installment payment.
Is it Sensible to Take a Personal Loan?
Personal loans are faster to get since they take a shorter time to process and disburse. As long as you have excellent credit rating, the bank may not take much time going over your credit history. Making it faster for you to settle your problems.
There are also fewer requirements for you to apply for the loan. The Southeast Asia region, offer loans to persons between the ages of 22 years up to 60 years. A salaried employee or anyone with a constant source of revenue is also eligible for the loan.
Collateral is not required when taking up personal loans. But, having enough wealth to settle your debt will heighten your chances of acquiring the loan.
Personal loans may have higher interest rates since its short term. This way, it will also guarantee the lender adequate revenue returns and risk insurance. You need to have good credit ratings to qualify for the loan. In return, your entire network growth may be in jeopardy. It also requires an accumulated settlement of debt which may lead to increased liability due to the interest payable upon loan maturity.
When is The Best Time to Take a Bank Loan?
Bank loan may serve as a good way to fund your business activities. Bank loan may be quite useful for the settlement of outstanding liabilities or replenishing stocks. The banking sector in Southeast Asia is quite helpful to the business owners. The banks allow them affordable rates and enough repayment period. This way, borrowers can settle their liabilities when they fall due while at the same time maintain their businesses afloat.
They can borrow a fair amount of money with affordable and low-interest rates. But, the person must provide security for a loan before they release the money. Borrowers have a longer period to settle the loan, not forgetting that repayment terms are well distributed. In this way, wealth will not be affected to pay the loan. It also provides a huge financial relief to persons that want to borrow a large sum of money.
The disadvantages in getting loans are the collateral. Borrowing money may take longer to process, so it may not be useful for emergency purposes. Upon expiry or repeated failure to settle your obligation, the bank may confiscate the borrower’s assets.
The best option between personal loans and bank loan depends on the purpose. Also, consider the period you would like to borrow the sum as well as wealth or collateral. Take time to determine the best alternative for you.