Should You Go For Festive Season Loan Offers?
Lenders offer festive loans to cater to the short-term needs of businesses. But, should you really go for festive season loan offers? Read to know!
India is a diverse land where various religions and communities celebrate numerous festivals. This season is when the demand for products and services is high, resulting in extra expenses and an issue of inadequate funds. Hence, lenders have designed festive business loans with modified and flexible terms.
Meaning Of Festive LoansLenders offer various financial aid products, such as business loans, personal loans, home loans, gold loans, etc., with a set number of charges and a predefined interest rate range. However, during the festive season, the demand for various types of loans is at its peak, increasing the competition among lenders. Similar to retailers offering heavy discounts on products and services, lenders modify their loan products to make them affordable and attractive for borrowers.
Festive season loans are the modified version of the existing loan products that the lenders offer by lowering the loan processing charges and the interest rate. Lenders offer festive loans to cater to the short-term needs of businesses or individuals who want to raise immediate capital to cover supply chain expenses.Such loans have a tenure of 6 months to 1 year but offer a lower loan amount than other types of loans. However, festive loans legally bind the borrowers to repay the principal amount and interest to the lender within the determined tenure.
Should You Go For Festive Season Loans?Festive season loans are a great way to seek business financing. For example, you can take a personal loan to cover the expenses of a home renovation or a business loan to ensure that your company meets the increased festive demand of customers to earn better profits.
However, there are numerous festive offers that you can compare based on the following factors.
• Loan Tenure:Festive loans have a shorter loan term. However, you must choose a lender with the highest loan tenure, as it would reduce your EMI amount. A loan with a higher tenure stretches the repayment period, thus, lowering the monthly EMIs.
• Immediate Capital:When you apply for a business loan, quality lenders approve the loan amount within 30 minutes and disburse it within 48 hours. Hence, you should ensure that your loan product has a quick approval and disbursal process.
• No Collateral:Festive loans do not involve pledging an asset in exchange for the loan. Although lenders relax the terms of festive loans, some lenders may ask for collateral. You should analyse the loan terms and ensure that the lender you choose provides loans without collateral.
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• Charges:Loans come with numerous fees, such as loan processing fees, prepayment penalties, foreclosure charges, etc. Since festive loans offer flexibility in some accounts, you should analyse the costs and choose the lender providing the loans at the lowest demands, such as zero processing fees.
Eligibility Criteria To Take A Festive Business LoanHere are the eligibility criteria to apply for a business loan.
1. Established businesses operating for more than six months at the time of application
2. The minimum turnover should be Rs 90,000 in the last three months from the time of application
3. The business does not fall under any category or list of blacklisted/excluded businesses
4. The office/business location is not on the negative location list
5. Should not be any charitable organisations, NGOs, and trusts
Documents Required For A Festive Business LoanHere are the documents Proprietorship, Partnership and Pvt. Ltd/ LLP /One Person Company will need to submit to complete the application:
• KYC documents—Identity proof and address proof of the borrower and all co-borrowers
• PAN Card of the borrower and all co-borrowers
• Last 6 to 12 months' bank statement of the main operative business account
• Signed copy of standard terms (term loan facility)
• Additional document(s) for credit assessment and processing of loan request
• GST Registration
• Previous 12 months’ bank statements
• Proof of business registration
• Copy of PAN Card and Aadhar Card of the Proprietor(s)
• Deed copy and company PAN Card copy in the case of partnerships
Avail Of An Ideal Festive Business Loan From IIFL FinanceIIFL Finance offers various festive loans with flexible terms. Through IIFL Finance business loans, you can get adequate business financing up to Rs 30 lakh with a quick disbursal process online and minimal paperwork. The loan’s interest rate is attractive and affordable to ensure the repayment doesn’t create a financial burden. You can apply for the loan online or offline by visiting IIFL Finance nearest branch and verifying your KYC details.
Q.1: Do I need a good credit score to take a festive loan?
Ans: Yes, it is better to have a credit score above 750 out of 900 to get your festive loan instantly approved.
Q.2: What is the loan tenure for IIFL Finance business loan?
Ans: The loan tenure for an IIFL Finance business loan up to Rs 30 lakh is five years.
Q.3: Do I need collateral to acquire a festive business loan from IIFL Finance?
Ans: No, IIFL Finance business loan does not require pledging any asset as collateral.
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