Traders have always been an integral part of the economy. Shopkeepers are also one amongst them. We all are dependent on them for our daily needs. Like any other business enterprise, shop owners are always in need of funds. Many money lenders have introduced specific shop loans to benefit individuals who want to own a shop.
Nowadays, an individual has a bunch of loan options to select from. Banks and financial institutions have specific eligibility criteria for shop loan approval. Here are certain factors one should keep in mind while applying for a loan for shop purchase!
- Eligibility criteria
One should check the lender’s eligibility criteria before making an application. If you do not meet the eligibility criteria of the lender, you will end up facing rejections. The credit score is one of the most important eligibility criteria. A good CIBIL score enhances the chances of getting a loan. A CIBIL score of 750 or higher is considered ideal by the lenders and the applicant can secure a loan at competitive rates. An applicant should check and improve his credit score for easy loan approval.
- Personal and legal documents
Legal and personal documents are an integral part of a loan application. When you apply for a loan for shop purchase, check all your documents. Purchasing a shop involves a lot of legal and financial papers. All papers should be in place for better chances of loan approval.
- The amount and tenor of the loan
You should always check your resources and ascertain the amount of loan you need to purchase a shop. You might get luring offers with lower interest rates and zero processing fees for a higher loan amount. But borrowing more than you need could be a burden on your business. You should also check the loan tenor while applying. A suitable tenor is a vital consideration.
Collateral security is a significant feature of any loan instrument. Some lending institutions provide a business loan in India without security. Yet, if you provide collateral for the loan amount, there are chances of getting it at better terms. You should check all the collateral at your disposal before applying for a shop loan.
- Repayment capacity
You should check your repayment capacity before making an application for a loan for shop purchase. You might be eligible for a bigger loan amount. But you may not afford it to repay. Hence, it is necessary to calculate your monthly income and expenses. It can help you avail of a loan that you can manage to repay.
- Research and comparison
Different money lenders provide shop loans on different terms and conditions. You should apply for a loan for shop purchase only after researching. Interest is the cost of availing of a loan. You can compare interest rates and the terms of lending institutions to make a better decision. You should also check the prepayment and penalty charges beforehand. Proper research and comparison can help you in getting a good deal. You can do that on a third-party website and choose a deal that matches your needs the best.
There are other considerations like existing debts, lender’s credibility and more. A loan is a debt that you have to repay. You should always decide to avail of it only after considering all parameters. Now that you know the factors you should consider while making a shop loan application, you can avail one with ease.
Bajaj Finserv presents pre-approved deals on business loans, home loans, personal loans and more. Its purpose is to simplify loan processing. You can share your basic details, such as your name and mobile number, to check out your pre-approved loan offers.