Personal or business loan: how to pick the right one

Unsecured loans are fast and need no property, but they cost more, and the fees and exit terms matter more than most customers realise.

Personal loan: who fits

• Salaried customers with a stable employer
• Small to medium needs in a hurry
• SBI Bank needs a Salary Package Account with SBI Bank
• HDFC Bank needs 2 years of total experience and 1 year in the current organisation
• ICICI Bank is the published option here that also lends to the self-employed

Business loan: four questions

• How old is the business? Lenders usually want 2 to 3 years or more
• What is the turnover? HDFC Bank lists ₹40 lakh, ABFL ₹1 crore
• Is it profitable on paper? ITR must show it
• How does the bank statement look? Bounces hurt

Three checks before signing

• Compare APR, not the headline rate. A 13% loan with a 2% fee can have an APR near 14.7%
• Ask what closing early costs. HDFC Bank publishes 4% up to 24 EMIs on personal loans, and ABFL has a 12-month lock-in
• Match the structure to the need: a term loan for a machine, an overdraft for stock

For a large need, a customer who owns property should also compare a Loan Against Property. The EMI is usually smaller, but the home then secures the debt, so explain both sides.