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5 Common Mistakes to Avoid When Applying for a Business Loan

Acquiring a business loan is a crucial decision which is why it requires extensive research about various lenders, their interest rates, repayment periods, documentation and various other aspects that are crucial to make a decision. One should be very careful about everything while applying for these loans as your repayment will depend on this. At times people don’t have enough knowledge about the different alternatives available to them to apply for business loan, which is important because this can help you look at options that offer competitive rates and better conditions than the ones that you know about. This article talks about various mistakes to avoid when you apply for a business loan to help you secure the best option based on your requirements. 

What are Business Loans?

Business Loans are loans that are usually acquired to expand your business activities further or, at times to start a new business. These loans help to purchase inventory for your business or to acquire a new location for your business. They are often used for acquiring a whole new business at times. It’s crucial to understand your business needs, and based on that, you need to apply for these loans. 

Applying Frequently

It is advisable not to apply to business loans more frequently or any loan because it can create problems like credit enquiry. This can also affect your credit score because when an enquiry is conducted on your application, they check your score. One can conduct thorough research to identify the lenders that are offering these loans and then choose the one that suits their requirements the best.

Inadequate Documentation

This means providing incomplete documents about your business. Lenders often want to review your loan application, which includes documents such as financial reports, financial statements, business plans, and all other paperwork required to convince the lender of your creditworthiness. 

This is why it’s important to provide all required documents to process your loan application.

Not Assessing Your Credit Score

When you don’t assess your credit score when applying for business loans, it can create various problems for you. Problems like fewer chances of securing a loan and being unable to get loan approvals in the future. 

Borrowing more than your Capacity

Another significant mistake that people make while acquiring these loans is not considering their repayment capacity. This means that people need to apply for a loan amount that they can easily pay back from their business profits. 

Providing False Financial Information

Banks and Financial institutions need actual financial information about your business and not something made up. When you lie about your financial details in the loan application you reduce your credibility in the market. This can hamper your ability to get such loans in the future. 

Conclusion

A business loan is a loan that is taken to start a new business, it is also taken to expand your existing business at times. There are various other reasons people apply for these loans, like purchasing inventory and other things. Before applying for such loans a person must avoid various mistakes to avail these loans smoothly. Mistakes include applying frequently, not providing adequate documents, not checking your credit score, borrowing more than your capacity, providing false information, etc. 

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PMAY Loan By TATA Capital

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SIP Return Calculators: A Game-Changer in Investment Analysis

Systematic Investment Plans, or SIPs, have gained popularity among investors in recent years. SIPs offer a systematic and efficient way for people to invest in mutual funds, which makes it simpler for them to reach their long-term financial objectives. To calculate the SIP return, investors use the SIP return calculator. In this section, let’s briefly review the SIP return calculator, its definition, and its advantages.

Understanding the SIP Return Calculator

An online tool that calculates the expected return on a SIP investment is called a SIP calculator. The user's inputs are what the calculator uses to operate. Simple inputs such as the investment amount or target amount, the step-up rate, the investment tenure, and the estimated rate of return are needed. The target amount strategy and the investment amount approach are supported by the calculator. The most popular method involves having the investor enter the investment amount, estimated return, tenure, and step-up amount. The target amount technique estimates the current investment needed based on the target amount the investor wishes to attain in the given duration.

How Does the SIP Return Calculator Work?

Using the compound interest formula, the mutual fund SIP calculator calculates prospective returns. In estimating possible returns, the calculator accounts for the number of times compounding is applicable. Additionally, one must input the estimated rate of return on the SIP, the period of the investment (in years), and the monthly amount to be invested in the SIP calculator.

Both the quantity of maturity and the wealth to be acquired by investing in mutual funds will be automatically calculated by the online SIP calculator. It is also possible to enter the target amount that corresponds to one's financial objective and then calculate the monthly amount that has to be invested for the specified tenure and growth rate in reverse.

How to Calculate SIP Investments Return?

Absolute returns, annualized returns, CAGR, and XIRR, are all used to compute SIP returns. The best technique for estimating SIP returns, nevertheless, is CAGR. The rate of annual growth for an investment throughout its whole life is called the compound annual growth rate, or CAGR. The CAGR formula is as follows:

CAGR = (ending value/beginning value) ^ (1/number of years or months) – 1*100

Advantages of SIP Return Calculator

The various benefits of the sip return calculator are as follows.

1. Calculate maturity amount: 

Investors can estimate their potential returns at the end of the investment period with the aid of the SIP mutual fund calculator. If the investor knows how much they hope to make at the end of their investment tenure, that information also assists in predicting the monthly investment amount.

2. Simple to use: 

The SIP calculator is very simple to navigate and use. To estimate their returns, one must input the necessary information. Additionally, the calculator spares investors' time from performing difficult computations. In a matter of seconds, the calculator calculates both the maturity amount and the monthly investment amount.

3. Tabular and Graphical Representation: 

The return estimates are displayed in both tabular and graphical formats on the SIP mutual fund calculator. This facilitates investors' ability to understand returns and make deft decisions with ease.

Conclusion

To make the most of your money, consider automating tiny investments in mutual funds at regular intervals with a systematic investment plan, or SIP. An online tool that might assist you in estimating the returns on your SIP investment is a SIP calculator. To find out how much your investment can increase if you invest today, use the TATA Capital SIP calculator.

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TATA Capital:India's Trusted Loan App. Quick Loan, Easy EMIs & Wealth Management

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Securing Low-Interest Personal Loans with Lenders

In a world where financial stability is quite significant, securing a low-interest personal loan is very crucial. One can take a personal loan for various reasons like debt consolidation, covering unexpected expenses, etc.. However, it’s crucial to take it from the right place. In this article, we’ll cover the steps that one can take to secure low-interest personal loans.

How to Secure a Low-Interest Personal Loan?

There are various lenders available, each offering different interest rates for personal loans. These lenders have different requirements and criteria for providing the loan which can make the loan amount higher. This is why one can follow the below-mentioned steps to get a loan at the lowest interest rate.

1) Assess Credit Score

Low interest rate loans are generally offered to people with a decent credit score. So, before applying for a loan, check your credit score, and try to improve if it’s not good. One of the ways to increase your credit score is to make the remaining payments as quickly as possible.

2) Try to Reduce Debt

When banks offer loans, they check for the debt-to-income ratio (DTI) of an individual. So, it’s essential that you check your DTI ratio by adding all your debts and dividing them by your gross monthly income. A higher DTI often leads to higher interest rate. Some of the ways to do this include the following.

Seeking debt counselling from banks or other financial institutions to get personalised guidance on managing your finances. 

Lowering the debt-to-income ratio by repaying your debt quickly. 

3) Check for Offers

Nowadays, lenders often offer loans online, and sometimes, they even give discounts on the existing rates. They also provide discounts if applied with a qualified co-borrower. You may also look for potential discounts from a bank or credit union which helps to get benefits like extended grace periods, etc. Reach out to reputed firms like Tata Capital, which provides several options to choose from.

4) Apply for the required amount only

Sometimes, we get approved for higher loan amounts than what we actually need. In such situations, one must ask the lender to lower the amount. This is because higher loans will make you pay higher interest rates.

5) Request Prequalification

Prequalification indicates the amount of loan you’ll be eligible for and the interest that you might have to pay. This step helps in securing a low-interest personal loan by allowing you to compare offers from different lenders without affecting your credit score significantly.

Conclusion

We often need personal loans for various reasons like debt consolidation, home renovation etc. But due to a shortage of time or due to delay in decision making we end up taking personal loans without proper research. This leads to paying higher interest rates. So, in order to secure loans at lower interest rates one must check different options. Reduction in debts and comparing offers availed by different lenders are crucial. Also, one can try prequalification, which lets you compare prequalified loans to know the estimated interest rate different institutions might charge. 

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A personal loan, an unsecured option,that helps in meeting personal needs conveniently. personal needs. Banks and non-banking financial corporations offer them at varying rates. Compare options from different lenders to choose the best personal loan.

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A vehicle loan is money you borrow from a bank or lender to buy a car or bike. You pay it back over time, usually with interest, until you own the vehicle completely.

If you don't have all the money up front, a vehicle loan is like a ticket to drive the car of your dreams. A bank or lender extending a helping hand by providing you with the funds to purchase the vehicle of your choice at that moment. After that, you gradually repay them, much like you would if you were accumulating money for it over time, but you get to use the wheels right away.