A growing business firm requires funds to keep its financial operations smooth and running. But often due to financial restraints, business owners are unable to smoothly operate their business optimally. In such a scenario, business owners can avail a loan against machinery
to keep their business functions operations uninterrupted.
However, intending borrowers must take into consideration these features before availing a loan against machinery.
Loan amount extended: Machinery tends to depreciate over time. While availing a loan against machinery, individuals should find out the current value of the machinery they want to pledge as collateral. Doing so, they will be able to estimate the amount they are likely to avail as a loan against it.
Repayment option and tenor: Individuals should opt for a tenor that allows them to pay their loan conveniently. Additionally, they should find out if their chosen loan against machinery option allows part prepayment and if such prepayment incurs any additional charges or not.
Approval and disbursal: Lending institutions take a couple of days to process a loan against property. They may do well to refer to borrowers who provide such loans in 4-5 working days.
Balance transfer facility: By opting for a loan option that offers balance transfer facility, business owners can transfer their outstanding loan amount to another institution which may be charging lower rates of interest.
To ensure borrowers have applied for a loan option that is most suitable for them, they should compare the features of loan options extended by different institutions. That said, loan against property borrowers should take into account the repute of their lenders before availing a loan from them.