In the case of an emergency, the best way to arrange for money is via a Personal Loan that can be given over all the other alternative options, such as one’s own savings or taking help from acquaintances fails to meet the requirement.
It turns into a challenge to secure finance if someone works in a proprietor firm. The reason behind this is that the lender has to check the credibility of the company that the applicant works for. In the case of a proprietorship company, ownership is held by one person; hence it does involve risks such as sustainability and turnover. These risks always exist in the case of a proprietorship company. An example is that if anything unfortunate were to happen to the proprietor, then the entire business could come to a standstill and there would be uncertainty in the job of employees. As the company could shut down or all the workers may not have gotten their salary and so on. It is in such cases, that any employee who gets a Personal Loan, the repayment shall become difficult due to the lack of income.
In choosing a bank for your Personal Loan, you need to compare the rates offered by these banks. This is to guide you in making the best and right choice. Carry out a research on the Personal Loan interest rates of these banks and picks the one that suits you. Apart from the loan charges, you also need to consider the processing fees, insurance premium, prepayment, and foreclosure. All these should be done so as to be sure you are making the right decision about your Personal Loan application.
Banks and other financial institutions provide several Types of Personal loans, which you could avail by keeping securities as collateral with the lender. This article lists such types of different financing options.
5 Ways for Employee of Proprietorship Company to Get Personal Loan are given below:
- Against fixed deposit:In the eventuality that the borrower has a Fixed Deposit (FD) account with the bank, then they can get a Personal Loan against this FD. The Personal Loan that is sanctioned by the bank is also at a lower interest rate. Additionally, the loan that is sanctioned against a fixed deposit also requires minimal documentation. In this type of a Personal Loan, where the guarantee is an FD along with the bank itself, the bank shall not be checking the employer’s credibility. The above-mentioned type of loan is secured only because the FD is pledged with the bank. The applicant shall get a loan amount which is almost 80% – 90% of the FD amount.
- High income:There is a greater chance of approval for a Personal Loan for Proprietorship Company, if the applicant works in a proprietor run company but draws a more than sufficient salary per month. If their income is higher than the required value by the ender, their loan requests are approved quickly. Also, if the company in consideration has been into business for a long period of time and if it has been profitable as well, then too the chances of getting a Personal Loan increase considerably. The salary slip and the bank statement shall be required by the lender to help in proving the individual’s income.
- Against securities:Employees who hail from proprietorship firms could also get a Personal Loan by keeping gold, keeping mutual funds, keeping LIC policy, or by keeping ETF, and savings bonds as a security with the bank. With each financer, the calculation of the loan amount varies. While a few may have a cap on the amount there are others that may lend money in accordance with the market value of the pledged security.
- Private money lenders:This particular option is part of this list, and does find mention. However, it must be avoided as far as possible as the private money lenders take control of your assets which include all forms of property such as gold, land deeds or any other form of assets until the entire loan amount is repaid.
In addition to this, there have been cases of fraudulent activities undertaken by these lenders as well. Most of these cases involve the forging of documents in order to take control of your assets. Some of the other disadvantages of taking a Personal Loan from such private money lenders are that the interest rate which is charged by them is extremely high while the recovery process employed by them is very bad. These risks and downfalls also come with a few benefits which include no credit history check, flexi-repayment option, quick disbursal of money, and so on.
- Peer lenders:In the eventuality that all of the above solutions fail then an individual who works at a proprietorship company can apply for a Personal Loan at peer to peer online loan marketplaces. Here the applicant gets the option to choose the investors or in other words, basically money lenders and while the applicant makes a choice, he or she can bargain at the same time for best interest rates. Despite every P2P lending company having its own eligibility criteria, the applicant does end up having vast options to choose a lender from. This is also known as PTPL, as these marketplaces are a safe method of getting a Personal Loan and the charges are extremely less in comparison to the banks.
So as seen in the points that were discussed above, there were multiple options for an employee of a proprietor owned company to ensure that he or she Gets Personal Loan for Proprietorship Company. An important point for all those whose loan applications have been approved or those who are in the middle of repaying the loan must remember to payback all the EMIs on time and it is this which shall entirely help in getting a good CIBIL score. This means that there should be no bounced cheques, insufficient balance, or anything of the sort, as a good CIBIL score is extremely important.