If you are looking to borrow funds, you might be considering an overdraft facility or business loan. Yes, both the credit facilities are different from each other but both provide financial support to the borrower, but they have their own characteristics. So below the comparison between a business loan and overdraft facility. Take advantage as per your choice which is suitable for your profile.
Business Loan
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To,TransUnion CIBIL Limited[Formerly known as Credit Information Bureau (India) Limited]One Indiabulls building ,Unit No 1901 – 1905,19th Floor, Tower 2A-2B, Jupiter Mill compound,Senapati Bapat Marg, Lower Parel, Mumbai 400 013
Sub: Grant of Consent
Dear Sirs,
In connection with submission of the application for my credit information offered by CIBIL (“Consumer Credit Information”) through Wishfin and delivery of the Consumer Credit Information to the Company, I hereby acknowledge and agree to the following:
- The Company is my lawfully appointed agent and he / it has agreed to be my agent for the purposes, including, without limitation, to receive the Consumer Credit Information from TUCL on my behalf and use it in the manner consistent with the Agreement entered into between the Company and TUCL, and the Company has granted its consent for being appointed for the aforesaid purpose.
- I grant my unconditional consent to the Company to receive the Consumer Credit Information from TUCL on my behalf and use it in the manner consistent with the consistent with the Agreement entered into between the Company and TUCL, as the case may be, and the Company has granted its consent for being appointed for the aforesaid purpose. I hereby represent and acknowledge that: (a) I have carefully read the terms and conditions of the Agreement entered into between the Company and TUCL understood the same; or (b) the Terms of Understanding in relation to the use of the Consumer Credit Information has been agreed between me and the Company.
- I hereby expressly grant unconditional consent to, and direct, TUCL to deliver and / or transfer my Consumer Credit Information to the Company on my behalf.
- I shall not hold TUCL responsible or liable for any loss, claim, liability, or damage of any kind resulting from, arising out of, or in any way related to: (a) delivery of my Consumer Credit Information to the Company ; (b) any use, modification or disclosure by the Company of the contents, in whole or in part, of my Consumer Credit Information , whether authorized or not; (c) any breach of confidentiality or privacy in relation to delivery of my Consumer Credit Information to the Company ; (d) for any use made by the Company which is contrary to the Agreement entered into between the Company and TUCL.
- I acknowledge and accept that: (a) TUCL has not made any promises or representations to me in order to induce me to provide my Consumer Credit Information or seek any consent or authorization in this regard; and (b) the implementation of the Agreement between TUCL and the Company is solely the responsibility of the Company
- I agree that I may be required to record my consent / provide instructions electronically and in all such cases I understand that by clicking on the "I Accept" button below, I am providing "written instructions" to Wishfin authorizing Wishfin to obtain my Consumer Credit Information from my personal credit profile from TransUnion CIBIL LIMITED, [formerly known as Credit Information Bureau (India) Limited]]. I further authorize Wishfin to obtain such information solely to confirm my identity and display my Consumer Credit Information to me. Further in all such cases “By checking this box and clicking on the ‘Authorize button, I agree to the terms and conditions, acknowledge receipt of TUCL privacy policy and agree to its terms, and confirm my authorization for Wishfin to obtain my Consumer Credit Information .
- I understand that in order to deliver the product to me, I hereby authorize Wishfin, to obtain my Consumer Credit Information from TUCL.
- By submitting this registration form, I understand that I am providing express written instructions for Wishfin to request and receive information about me from third parties, including but not limited to a copy of my consumer credit report and score from consumer reporting agencies, at any time for so long as I have an active Wishfin account. I further authorize Wishfin to retain a copy of my information for use in accordance with [Wishfin’s] Terms of Use and Privacy Policy.
- I UNDERSTAND THAT THE PRODUCT IS PROVIDED ON AN “AS-IS”, “AS AVAILABLE” BASIS AND TUCL EXPRESSLY DISCLAIMS ALL WARRANTIES, INCLUDING THE WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.
- I shall not sue or otherwise make or present any demand or claim, and I irrevocably, unconditionally and entirely release, waive and forever discharge TUCL , its officers, directors, employees, agents, licensees, affiliates, successors and assigns, jointly and individually (hereinafter “Releasee”), from any and all manner of liabilities, claims, demands, losses, claims, suits, costs and expenses (including court costs and reasonable attorney fees) (“Losses”), whatsoever, in law or equity, whether known or unknown, which I ever had, now have, or in the future may have against the Releasee with respect to the submission of my Consumer Credit Information and / or my decision to provide TUCL L with the authority to deliver my Consumer Credit Information to the Wishfin . I agree to defend, indemnify, and hold harmless the Releasee from and against any and all Losses resulting from claims made against TUCL L by third parties arising from and in connection with this letter.
- I agree that the terms of this confirmation letter shall be governed by the laws of India and shall be subject to the exclusive jurisdiction of the courts located in Mumbai in regard to any dispute arising hereof. TUCL is entitled to assign its rights hereunder to any third person without taking my prior written consent.
Yours faithfully,
Name :____________________________Address : ____________________________Date : ____________________________
Business Loan
Business loans are basically designed for business purposes. A business loan is a fixed amount of borrowing money over a set period with regular repayments. You need a certain amount of money to start a new business, so a business loan is the best option to grow your business at a certain height. A business loan can opt for anybody who requires funds you have just to fulfil the basic requirements. A business loan is an unsecured loan that can be used for various purposes such as –
- Expanding the existing business
- To meet working capital needs
- For hiring new staff
- Training of new employees
- Purchase new plant and machinery
- Buying raw material
- Purchases new furniture
- Stocks and inventory
- Buying new premises
- Opting new technology
How does Business Loan work?
To take a business loan from any financial institution, you just have to fulfil the terms and conditions of that financial institution. As each lender has its own way of dedicating the loan amount. A lender pays different interest rates to different borrowers. The lender gives you the loan amount based on your CIBIL score, previous repayment tracks and more. This is the basic structure of your business loan amount. The rate of interest is taken as a percentage of the principal amount.
Why Choose Business Loan?
Here are the few reasons why to avail a business loan
- A business loan is basically taken for a long period of time.
- If you are planning to take a business loan for a longer period then the interest rate will not be as high.
- The interest rate is fixed and floating you can take as per your choice.
Overdraft
Overdraft is a facility that allows you to withdraw money from your current account, even if your account balance is also zero. Basically overdraft facility may be available when you have an emergency. This facility may be available for short term business needs.
How Interest Rate is Implemented on Overdraft
As different lenders have different criteria for implementing the interest rate. So the interest rate will be decided on the basis of the amount for which borrower is eligible and the credit balance on your account.
Why Choose Overdraft?
- Get a flexible option for borrowing and repayment options.
- This overdraft facility is for short term and it is the cheapest.
- You can even borrow money from your current account when your account has insufficient funds or zero balance.
Advantage of Overdraft Facility
- Avoiding unnecessary fees if the overdraft exceeds your limit.
- The best way to handle short-term changes in your cash flow.
- If you have this credit facility in your current account, you can be overdrawn to an agreed limit.
- With the help of the overdraft facility, you can avoid late payments and fines even if there is insufficient balance in your account.
Compare Business Loan with Overdraft Facility
About Business Loan
A business loan is an amount that can be repaid for a fixed time period in the form of monthly EMI.
Know About Overdraft Facility
In overdraft facilities, you can withdraw money, even if you have a zero balance in your account.
Business Loan v/s Overdraft
- If you are looking for a longer-term, then opt for a business loan or for a short term benefit get overdraft facility. Both the rate of interest and the method of application is different.
- A business loan is a better option if you are taking a loan for a higher amount and longer tenure whereas overdraft is for less amount and short tenure.
- Business loans can be availed by any businessman, but overdrafts can only be taken by those who have a current account.
- loans can be availed for fixed and floating interest rates, while overdrafts can be availed by some lenders at no interest rate.
- Business loans are available for 5-10 years, but overdraft facility is available for one year only, it can be renewed every year.
- In a business loan, the interest rate is levied on the monthly principal while the overdraft depends on the daily debit balance.
Both business loans and overdraft facilities have their own features and benefits. Hence you can avail both credit facilities with the help of minimum documents. This entire process is hassle-free.
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