With the rise of entrepreneurship culture and the call out for the Make-in-India campaign, the number of people seeking business loans has increased drastically. Obtaining unsecured business loans is no more an exceptional procedure to raise the capital amount for your business. An unsecured loan is a collateral-free loan where you do not have to offer any guarantee as security to the money-lending financial institutions. The loan is offered based on your creditworthiness.

However, there are a few prerequisites that you should know before applying for an unsecured business loan.

• Before going through the application process, understand all terms and clauses and talk to the relationship manager if you do not get any of the conditions. Also, enquire if there are any hidden clauses.
• Different lenders have different payment modes, repayment failure clauses, and penalties which should be understood rather than regretted later.
• Be clear with the timelines of your business plan and have it handy while going through the unsecured business loan application process. You should be able to map your planned timelines and loan application, approval, and sanction timelines to avoid a shortage of funds or a delayed process.
• Have clarity on the interest rate and the repayment period.  Every lender has their business loan interest rate and repayment time frame. You should research and opt for a lender offering the lowest interest rate and flexible repayment tenure.
• Choose a lender who offers competitive loan amounts. The loan is approved based on various factors like the tenure of your business, profit state, creditworthiness, and many more. You should choose a lender offering loan amounts meeting your business needs in all aspects.
• Review the lender’s background and reliability. While it is important for lenders to verify your credit score before approving a loan, you should also validate the lender’s market value, read the testimonials, visit their office, or browse their website to understand more about them before finalizing the loan application.

There are several NBFCs with attractive offers on unsecured business loans. You should gauge various aspects that work for you and choose the best one.

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