Thinking about starting a business? Making the shift from being just an employee to an employer requires a lot of guts, dedication, and most of all money. Few can afford starting a business from their own savings, as starting one requires lots of cash to buy properties, equipment, supplies, and to hire employees.
But with the wide availability of loans, starting your dream business is made easier today. Unfortunately, with loans comes the expense of paying an interest. Now, no one would offer you loans without giving it an interest, but you may be able to get the lowest rate with the help of secured personal loans.
Secured personal loans are just like normal loans, but with a small catch. With a secured loan, you have to register a security interest over a property you own, such as a car or a house, to “secure” the loan with. This way, in case you weren’t able to pay the loan, the lending company may be able to recover their money through selling the secured property. Now, this does not necessarily rule in favor of the lending companies as choosing a secured personal loan over an unsecured one can give you a lot of benefits.
Advantages of Getting Secured Personal Loans
There are several upsides that this type of loan can offer you and your business:
1. It gives you lower monthly payments
Because you loan is secured by a property, financing companies allows you to pay the loan in a longer period of time, thus lessening the repayment required each month. This ensures that you would be able to pay the loan, although for a little bit longer.
2. You can use if for any purpose
Since other loans, especially mortgages, have restriction on where you can use them, a secured personal loans usually can be used for anything. You could use it to buy gadgets, properties, equipment, or supply for your business. A secured personal loan can be used to jumpstart your dream business.
3. You don’t need a perfect credit rating for one
Since these types of loans are secured by a property of almost equal value, you could get a secured personal loan without a great credit rating. Since the loan is backed by a property, lending companies may be willing to consider risky borrowers.
4. It has better rates than other loans
As you are securing the loan with a property, lending companies are willing to offer you lower interest rates than other loans. This difference could be as much as 2%, which is a huge saving considering it is an amount you save each year.
Although there is a slight chance of losing the property you secured the loan within the case you default on the loan, some lending companies do offer lending calculators in which you could calculate how much you have to repay at a repayment schedule of your choice, whether weekly, fortnightly, or monthly. This way you would be able to get an idea how much you have to pay, lessening the chance of you getting a loan you wouldn’t be able to pay in the long run.
With the right amount of information, perseverance, and a little luck, you would be able to succeed in your dream business in no time.