Blog #Loan Calculator

One can get a loan from the nearest branch of any bank. For more bank branch details one can visit the online website of the bank. Getting a loan is a big deal. One should be well researched before applying for a loan. Banks and non- banking financing companies have their own different eligibility process. Getting a loan from a bank can be very time consuming sometimes. It requires a proper documentation process. 

One can calculate the loan availed from the bank through a Loan Calculator. Banks and non-banking financing companies have helped thousands of people in financial difficult times by providing them loans. Various sectors have been benefited during financial difficult times by availing loans such as primary sector, secondary sector and  tertiary sector. It has also helped in the growth of Indian nation. People all over India trust and believe in its banking sector. It is one of the most trusted sectors of our country.

Many times people might face difficulties in availing loans. There can be various reasons why one’s loan is being rejected. 

Some of the most common reason due to which loans get rejected are:- 

1) Bad credit history:- One of the main reasons for rejection of loan can be borrowers' bad credit history. For availing loans one must have a good credit score and history. Many banks and non-banking financing companies(NBFCs) do not approve loans of the borrower with bad credit history and score. One must look after the credit score and history before applying for a loan. As there is a probability of rejection of the loan application when a borrower has bad credit history and score. 

2) Insufficient Income:- This is another major reason for rejection of the loan application. Many lenders at banks and financing companies look at the work, investment, and other income before they approve your loan. Lender needs to ensure that you can repay the loan back. One with insufficient income might face difficulties in availing loan. One should check the income before applying for the loan. 

3) Lack of collateral:- When applying for loans such as gold loan, business loan the lender looks at the collateral. Without collateral, lenders may find it difficult to approve your loan. One can provide personal assets as collateral. Collateral by the lender is taken for the security purposes and is returned after the successful payment of the loan. One must provide collateral for fast approval of the loan.

4) Over-borrowing:- If the borrower has taken too many loans together then financing companies and banks may not give you fast approval of the loan. As they may consider you a risky candidate. One must not take too many loans all together. While applying for the loan one must have a clean history. 

People might find difficulties in approval of the loan many times. One must keep a clean record with a good credit score and history for fast approval of the loan. One needs to be aware of the bank branch details required. Many financial companies and banks do a research analysis of the profile of the borrower before lending them the money. One with a good history of repayment of the loan can be provided fast approval of the loan. There are various private and public banks which provide loans to the people all over the country living in rural as well as urban areas. One can use the loan amount for several purposes during difficult times. Many people make several mistakes while applying for a loan one should avoid those mistakes for the fast approval of the loan. One can consider this article before applying for a loan as the common mistakes which people make while applying for a loan are mentioned above.

Must read:- Features of Vehicle Loan 

Companies that are in demand of capital generally look out for two options: Debt Finance and Equity Finance. Most of the time, the choice depends upon the source of funding readily available for access by the company. Debt finance refers to the act of borrowing money, while Equity finance refers to the act of selling certain portions of the equity to raise capital. Equity finance’s main advantage over Debt finance is that there is no requirement to pay back the amount in equity finance. In addition, equity finance does not cause any obligations and hurdles for the company. The main advantage of Debt financing is that the owner of the company does not lose ownership of the company in any way possible.

Equity Finance:

Equity finance is a way to raise capital for a company by selling a portion of the company’s equity. The ownership can be distributed among individuals as per the decision of the Business owner. There is no requirement for the Business owner to pay anyone any amount of money. The equity distributed among individuals generate dividend for them based on the performance of the company. Companies usually try to provide an excellent return to the investors to maintain a good image among the masses.

The disadvantage of Equity financing is that the business owner would be required to buy every equity share of the company to achieve the complete ownerships of the company once again. It can be expensive if the share prices go high due to the performance of the company. This is a very major issue that a lot of companies have faced in the past. This can prove to be a major loss for the business owner in case the business fails due to any reason. 

Debt Finance:

Debt Finance is borrowing money and repaying it with a certain amount of return based on the accepted condition between the lending and the borrowing party. In some cases, debt financing can limit a company’s actions for certain fields. There are numerous advantages of Debt financing. Debt finance’s most significant advantage is that the lender does not have ownership over the borrower’s business. Once the borrowed amount is paid back, the relationship between the lender and the borrower ends. In addition, the interest charged on Debt finance options is usually Tax deductively, which can be considered to be a huge advantage for the business owners. 

Debt finance’s disadvantage is that it requires the borrower to pay back the loan amount regularly as per the lending institution’s policies. In addition, in the majority of the cases, the lending body requires the applicant of the loans to provide some kind of security which can be an asset that the business owner owns. Therefore, if a person chooses the Debt finance option, the monthly expenses would be increased for him/her.

The requirements for the application process of Debt Finance options include the following:

1) Evidence/proof of identity of the applicant.

2) Proof of residence of the applicant.

3) Age Proof of the Applicant.

4) Documents related to the Business the applicant owns.

5) Bank Details of the applicant like account number, IFSC code, etc.

However, an Online Loan Calculator can be used to estimate the amount required to be repaid during the loan tenure. The requirements to use a loan calculator are the rate of interest, loan amount, and the tenure of the loan. Therefore, these loan calculators can be very helpful for estimations of the repayment amount.  

It is advised for you to raise capital with a mix of equity and debt finance. Most companies follow this method to sustain themselves for a long time. If your company has just started, it would be advised to go for Equity fundings as the monthly repayment burden would significantly reduce. There are several available resources in online and offline mode that can help you further understand the working of Debt financing and equity financing. 

Also read this: Why approval of the Personal Loan gets rejected