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Personal Loan
Overview
A lot of people don’t know that you can actually use a personal loan for business purposes. Personal loans are especially helpful for new businesses that don’t have a long financial history to show lenders. Personal loans can often have lower interest rates than some business loans, making it a great option for young companies looking for financing to grow their business.
Maximum Loan Amount
RM5,000 - RM250,000
Repayments
1 - 7 Years
Interest Rate
Starting from 6% p/a
Speed
As little as 3 days
How Personal Loans For Business Work
While you can use personal loans for business purposes, it is important to understand how personal loans “for business” differ from the traditional business loan. Personal loans are highly dependent on your individual credit score rather than the financial track record of your business. In fact, the personal credit score is the most important part of the personal loan application. After all, these lenders are making a loan to you, the business owner, and it is your responsibility to repay the loan. The fact you’re using the loan for your business doesn’t change that.
For new businesses or small businesses that do not yet have significant financial history, personal loans may be a perfect fit. That being said, personal loans for business are only really an option if the business owner has a strong credit score.
Cost
The nice thing about personal loans is that their cost structure is very easy to understand. You pay back these loans with fixed monthly payments, making it simple to budget for this expense. However, be aware that these loans will have a closing cost. If you apply for a RM50,000 loan and there is a 0.5% RM250 agreement fee, that means you will only see RM49,750 in your account, but will pay interest on the original RM50,000.
Who Qualifies
If you have an average or excellent credit report, personal loans for small business may be an excellent option. And, to reiterate, nothing about your business will be considered in the loan application. Lenders will be purely focused on your personal finances.