madinashabana11 (MBA) (1102 Points)
26 November 2011Hi friends, i have a query regarding a bank loan.
My friend is running a smalll busines n for the purpose of extension of business he requires Rs. 6 Lakhs ( approx)
he is willing to approach a bank for loan.
Then my query is can he obtain a loan from bank for such purpose???
If so, for which loan shud he apply, i mean Personal loan or Business loan ???
and plz mention what are the requirements need to apply for a Personal / Business Loan.
plzzz friends advise me regarding this............
* Krishna *
(CA Student)
(6149 Points)
Replied 26 November 2011
In my view, he can take Personal loan rather than taking business loan. Because taking business loan is difficult as he is only small trader. Personal loans given by various banks may range from 5-10lacs which have repayment period ranging from 3-5/7 years. Usually, the documents asked by banks are ID proof, 3 months bank statement, residence proof, guarantor (may be asked by some banks depending on banks criteria, which will be decided based on the amount of loan asked).
As he is self-employed, they may also ask balance sheet, PL a/c etc. After submitting these, banks will then evaluate the application based on the applicant's repayment capacity, relationship with the bank (if he already have a/c in that bank). They will also check the applicants credit history with the CIBIL. Hope your friend does not have any other loans pending or made default earlier. Check other details with SBI/HDFC/Citibank. Banks usually wont ask the application of borrowed money.
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