What type of loan is right for your business? See the best personal loans in January

Whether you have just started a new business or are looking for additional funds to expand your business, you have the option of choosing the type of loan to borrow funds from.

The latest loan indicators from the Australian Bureau of Statistics (ABS) revealed the value of new term personal finance loan commitments fell 1.3 per cent in November, following a 0.5 per cent fall in October.

Liabilities for personal lending were withdrawn by the drop in lending for personal investments, by 9.3 percent in November. New liabilities for loans for road vehicles also fell by 2.9 percent. However, household goods lending rose 5.1 percent to an all-time high of $154 million.

Despite the decline in borrowing, there are still many competitive personal loans that can support your financial needs, for example in business. Deciding between a business and a personal loan requires careful consideration.

What is the difference between a business loan and a personal loan?

A business loan is used to finance specific business needs and can be cumbersome due to the large amount of paperwork involved. On the other hand, getting a personal loan can be simpler, but you risk losing your assets if you default on a secured loan.

The main differences between these two types of loans include:

Application process – Requests for a personal loan are usually quick and simple, while a request for a business loan can often be complex and time-consuming.

The amount you can borrow – Lenders will approve a business loan amount based on the future prospects of your business. This can allow you to borrow more than you could with a personal loan.

Loan flexibility – How you spend the money you borrow is generally more flexible with personal loans than with business loans.

Credit history – With a personal loan, you build your personal credit history. The business loan will be counted in the credit history of that company. Which is right for you will depend on your future financial motives.

Finding a personal loan that suits you

If you’re looking for a personal loan with repayments that fit your budget, creditworthiness and desired loan term, RateCity’s personal loan calculator can give you an estimate to help you find the one that’s best for you.

RateCity has ranked the top rated personal loans in our personal loan rankings using our comprehensive and game-changing Real Time Ratings™ system. This system gives loan products a rating out of five possible, based on cost and flexibility. Unlike other rating systems that rank their products once or twice a year, our Real Time Ratings™ system ranks products live as you use the site, helping you narrow down your personal loan options.

The ranking is correct at the time of publication. Keep in mind that lenders can change places on the list as interest rates and fees change, and RateCity’s tracker reflects those movements.

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