Can Homemakers Start A Business With A Personal Loan?

Personal loans, which are typically considered consumption loans, are in high demand in India. Personal loans have witnessed a 23% year-on-year rise in the number of women borrowers during the first nine months of FY21. In the personal loan segment, active loans to women borrowers totaled Rs 64.82 lakh as of March 2021.

Are you wondering what percentage of women in the above statistics are housemaker? Well, it is difficult for a housewife with little or no income to secure a loan to start a business. There are many women in rural regions operating pickle or handicraft businesses, but their expansion is limited owing to a lack of funds. So, it is only natural to wonder—can a woman start a business with the help of a personal loan?

The most important criterion for obtaining a personal loan is a steady source of income. Working women can easily obtain a personal loan with no difficulty. However, for housewives who do not have a regular source of income, obtaining a personal loan may necessitate employment of some type.

How Can Housewives Get A Personal Loan To Start A Business?

• Add Co-applicant

A working co-applicant can help housewives receive an unsecured personal loan. Co-applicant can be your husband, father, or anybody else the lender thinks appropriate. The income of the co-applicant will determine the personal loan amount. The maximum loan amount can be multiple of the co-applicant’s take-home income. In this case, the co-applicant is equally responsible for the EMI payment of the personal loan for business person.

• Add a Guarantor

Housewives willing to take self-employed personal loans can also add a loan guarantor instead of a co-applicant. Add a guarantor if you are confident about your business model and are sure about your repayment capability. A loan guarantor is a person who pledges to repay the debt if the primary borrower fails to do so.

• Government Schemes

Nowadays, the government, through its various schemes, helps women to get a personal loan quite conveniently. Moreover, these schemes do not require a huge set of papers for personal loan documents. However, such type of loan schemes requires a guarantor. You can apply for these schemes under PradhanMantri Mudra Yojna for Women or Udyogini Scheme.

In the worst-case situation, if you are a housewife and are unable to obtain a personal loan, you may opt for other loan forms to help you establish your business. The following are the funding options you can avail to start your business:

• Avail Secured Loan

If a homemaker does not have any past credit history, it is advisable to avail of a secured loan. Secured loans are those that are available against the borrower's asset. The lender will undertake the custody of your asset until you fully repay your loan. If a housewife owns any such assets that she can use as loan collateral, she will find it simple to obtain a secured loan by adding a co-borrower who has a stable source of income.

Also Read: 6 Foolproof Tips That Can improve Your Personal Loan Application

• Gold Loan

Gold, in some form or the other, can be found with almost every housemaker. One can put gold ornament to the best possible use by taking out a loan on it. The gold jewellery in your locker has the potential to get you a gold loan. Gold loans far less expensive than other unsecured loan forms. It is one of the best sources to avail of a loan for homemakers aspiring to be business owners.

Also Read: How Personal Loans Help During An Emergency

Features of Personal Loans for Housemakers

• Multiple Usage

Housemakers can use the loan amount for any form of business, at any stage. There are no limitations attached to the usage of the borrowed money.

• Convenient

Housewives usually do not have a credit history or steady income. As such, by adding a co-applicant or a guarantor, one can easily get such type of loan.

• Flexibility

Just like any other personal loan, this too comes with flexibility. Housemakers can choose loan repayment tenure of their own choice.

• Fast Loan Approval

There is no need to visit a lender in person; you can apply for this loan online. Also, the paperwork required is minimal, resulting in the fast disbursement of the loan.
 
Also Read: Why You Should Go For A Business Loan (Not A Personal Loan) For Your Business

Conclusion

Starting a business with personal loan allows housewives with a smart business mind to reinvent their ideas. It can be a terrific alternative to a business loan for housewives with no consistent income. Also, it is advisable to go for a personal loan in the early stage of your business.