In today’s digital world, online apps have come a long way and completely revolutionised how entrepreneurs used to take business loans. These apps have eliminated the need to manage lengthy paperwork and wait for days to get approvals and introduced a seamless application process to get an easy business loan. And to make the whole process as convenient as it sounds, you need to avoid certain mistakes that can delay or complicate the whole approval process.
Here is a guide that will mention some of the common mistakes to avoid when using business loan apps and help to turn your business dreams into a reality. Let’s explore:
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Skipping Researching
One of the most common mistakes that borrowers usually make is ignoring researching about lenders and their terms and conditions. Don’t rush into things, as it can lead to getting a business loan at higher interest rates. Look for apps that offer unique features like the flexibility of tenures and compare different options so everything can be very well-aligned and suit your business goals and needs.
Tip: Look for a business loan app India that is committed to providing transparent terms and conditions, and take time to research your options.
Inaccurate Information
Be truthful to your lender while providing detailed information when applying for the loan. Inaccurate information may lead to application rejection or delayed processing. Remember that even if your loan is initially approved, it may also lead to further rejection.
Tip: Double-check all the details and upload all the accurate updated documents.
Avoiding Eligibility Criteria
Before applying, ensure that you qualify for the lender’s eligibility criteria. Each business loan app has its own criteria for minimum business turnover, credit score requirements and operational history. Ignoring this may lead to wasted time and effort, and you won’t get a loan for new business.
Tip: Business loan apps provide all the criteria on their platforms, so read all the details carefully and make sure you qualify the same.
Ignoring Terms and Conditions
Skipping reading the fine print and overlooking the terms and conditions is one of the most common mistakes that borrowers make. Ensure that you read everything carefully and pay special attention to interest rates, tenures and additional fees charged on the loan. Clear your doubts with the lender before signing everything.
Tip: Take your time, read the terms and check if everything is aligning with your financial goals.
Not Maintaining a Good Credit Score
A credit or CIBIL score is something that lenders pay the most attention to before approving your loan. It is the score that determines your creditworthiness and helps you get an easy business loan with favourable terms. Borrowers with a good credit score (potentially more than 700) get loans at lower interest rates and flexible tenures.
Tip: Review your score regularly, pay off your debts, bills and existing loans and avoid applying for multiple loans at once to maintain and improve your credit score.
Overborrowing or Underborrowing
Assess your loan amount needs and avoid overborrowing to remove an extra burden off your shoulders and underborrowing to avoid insufficient funds. It avoids an unnecessary financial strain, and you can repay your loan seamlessly.
Tip: Analyse your business goals and requirements to know the amount that’s needed and even assess the tenure of repayment.
Final Thoughts
Business loan apps offer the convenience of applying for quick loans and managing the application without worrying about managing documents and visiting the branches. Trusted business loan apps India, like Bajaj Finserv, provide easy eligibility criteria and are digital, allowing users to make applications from the comfort of their homes.
Make sure you choose a reliable business loan platform and avoid making mistakes to get seamless loan approvals and achieve long-term success.