What Is The Difference Between A Personal Loan and A Business Loan?

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If you’re new to quick cash loans, then you may not know the difference between a personal loan and a business loan. To some, the answer is simple. A personal loan is for personal use, while a business loan is for business use. But the truth is, it is more than that.

Defining Personal Loan

Personal loan, also known as a consumer loan, is a form of financing for your personal use. A personal loan is either secured or unsecured.

A secured loan will require the amount to be guaranteed either by a co-signer acting as a guarantor or a personal asset. If you default on the loan or fail to make payments, the lender will either approach your guarantor and demand the payment or seize your asset.

An unsecured loan, on the other hand, is a borrowed amount approved based on the lender’s assessment on your ability to pay. The assessment is based on your income and your credit rating.

Defining Business Loan

A business loan is specific for business purposes. Getting one will require a more serious and detailed look at your company’s credit and financial history. A business loan is varied and is specialised for various purposes. Lenders will customise a financing solution that fits your business’ financial needs.

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