The lender assesses your financials, GST returns, bank statements and credit history, and prices the risk of lending without security.
Security lowers the lender's risk and the rate follows.
Take LAP when the amount is large, the tenure is long, the use is an asset or capacity that will still exist in five years, and the repayment source is predictable.
For recurring working capital, cash credit or an overdraft limit often fits better than a term loan.
Whichever route, the file decides the timeline.
Secured and unsecured borrowing solve different problems. A practical comparison of cost, speed, risk and eligibility for an Indian business owner deciding between them.