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In recent years, more and more women entrepreneurs have entered into the business sector. As of now, 13.76% of entrepreneurs in India are women. Additionally, women own as much as 10% of formal enterprises.

To encourage women business owners to launch, expand and run their businesses, the Indian Government has introduced various loan schemes with attractive loan terms. This has given rise to business loans for women. 

Read on to find more details on business loans available for women and how you can obtain one.

Steps to Obtain a Business Loan

Women business owners can obtain financing for their enterprises by following a few simple steps, such as:

Step 1: Conduct extensive research on different loan offers by banks and financial institutions and check if you are meeting the eligibility criteria.

Step 2: Visit the website of your preferred lender

Step 3: Click on Apply Now

Step 4: Review the list of documents needed to obtain the loan

Step 5: Fill in the application form with all the needed details

Following this, a representative of the lender will get in touch with you regarding further steps. Note that you must keep all documents handy beforehand for a hassle-free application process. There are various options for availing of business loans for women. You can opt for traditional bank loans, NBFC loans, micro-financing, or loans from various fintech platforms. Women entrepreneurs looking for loans from fintech platforms can opt for Lendingkart business loans with zero collateral, simplified processing, and fast disbursal.

Loan Schemes for Women Business Owners

Here is a compiled list of tailored business loans for women that you can consider applying for:

Pradhan Mantri Mudra Yojana

The government launched Mudra loan schemes to provide financial assistance to individuals running medium, small, and micro enterprises. You can obtain this loan without pledging any asset as security. The different schemes available under the Mudra loan are:

• Shishu Loan: You can obtain this if your business is in its starting stage. The maximum loan amount you can obtain is Rs. 50,000.
• Kishor Loan: This loan is for established businesses wishing to improve their services and expand. The loan amount ranges from Rs.50,000 to Rs.5 Lakh.
• Tarun Loan: This loan is intended for well-established businesses that want to expand their reach. The maximum that you can borrow will be Rs. 10 Lakhs.

Annapurna Yojana

The Annapurna Yojana is one of several government loan schemes curated for women entrepreneurs. The Government of India offers individuals operating food catering businesses loans of up to Rs. 50,000. The borrowed funds could be used to meet working capital requirements such as purchasing utensils, a mixer and grinder, a hot case, tiffin boxes, a working table, and more.

You do not have to pay the EMI for the first month after the loan is approved. Once approved, the loan must be repaid in 36 monthly installments. The interest rate charged is determined by the market rate and the lender.

Stree Shakti Yojana

The Stree Shakti Yojana is a government scheme for women that encourages entrepreneurship by offering tax breaks. This women-centered loan scheme is only available to women who own the majority of a company.

Another requirement to fulfill eligibility under this scheme is that female entrepreneurs need to participate in the Entrepreneurship Development Programme (EDP) run by their respective state agencies. This Stree Shakti scheme can provide you with a 0.05% interest concession on loans more than Rs. 2 Lakhs.

Dena Shakti Scheme

The Dena Shakti Scheme offers loans of up to Rs. 20 Lakhs to women entrepreneurs in agriculture, manufacturing, microcredit, retail stores, and small businesses. This government scheme for women also includes a 0.25% interest rate reduction. Furthermore, under the micro-credit category, women entrepreneurs can obtain a loan of up to Rs. 50,000.

Bhartiya Mahila Bank Business Loan

The Bhartiya Mahila Bank (BMB) is a public sector banking company that provides loans to women entrepreneurs of up to Rs. 20 Crores for working capital, business expansion or manufacturing requirements. The different plans available under this woman’s loan scheme are:

• Shringaar: The Shringaar loan from BMB is for self-employed women or homemakers who are starting a business or need money to run day-to-day expenses. You are not required to provide any collateral for this loan.
• Parvarish Loan: This is designed for self-employed women or homemakers who want to open daycare centers. The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGSTSM) scheme allows for a maximum loan amount of Rs. 1 Crore with no collateral.
• Annapurna: Food entrepreneurs aged 18 to 60 wanting to start or expand their small businesses can apply for this loan. You do not need to pledge your asset as collateral to obtain this loan.

Mahila Udyam Nidhi Yojana

The Mahila Udyam Nidhi Scheme, one of the most popular government business loans for women entrepreneurs, is offered by the Punjab National Bank and the Small Industries Development Bank of India (SIDBI). The scheme helps women entrepreneurs establish a new small-scale business by providing loans of up to Rs. 10 Lakhs with a repayment tenure of 10 years. 

With the availability of so many business loans for women, obtaining financing for women’s entrepreneurship has become simpler and hassle-free. Consider knowing the eligibility parameters of such schemes before proceeding. This will help you make informed borrowing decisions.

The main premise you must follow when using a credit card is buying now while paying in the future or later. That is why you should learn how to use it wisely, which will help you prevent overspending and using it in improper and ineffective ways.

Using a credit card is not a bad thing per se because it is the most effective way to establish a credit history and score. At the same time, they are highly convenient and safe and can help you use the short-term cash flow you should return before the interest starts accruing the balance.

However, they can easily become your worst enemies and reason for financial instability. You should enter here to learn everything about getting a credit card.

According to surveys, US households have at least five thousand dollars in credit debt, while forty percent of them do not have four hundred dollars for emergencies. The main idea is understanding how to use them wisely and properly, which will help you manage a budget and avoid entering more significant debt than before.

When you take a credit card, you can take advantage of different rewards and perks, but the problems may turn up in a matter of seconds. That is why you should learn how to wisely use credit cards before making up your mind.

Avoid Debt Trap

You probably know that credit cards are revolving credit, meaning you can borrow money to a certain limit and return it based on the amount you took. In most cases, you should make a monthly payment at least or repay it beforehand.

You can borrow, spend, and pay back as many times as you can, but you must repay everything before the due, which will prevent additional interest and debt. Three essential features of credit cards can affect your financial situation and lead you to significant debt, including:

• High Rates: The average interest rate when it comes to credit cards is fifteen percent, while most of them go above twenty percent, depending on your credit score and other factors.
• Daily Interest: You should remember that interest will affect you daily, meaning you will start paying interest on interest after a while. Therefore, you should handle the expenses before their due, which will provide you peace of mind.
• Low Minimum Payments: The best course of action is to limit spending, and you will stay in perfect standing. However, they come with low monthly payments, which means you can easily add up the debt and enter a point of no return. That is why we recommend you repay everything.

These aspects can easily get out of control, meaning you should be as responsible as possible. You can take advantage of cards such as credit building, security, and convenience, but you should manage everything carefully to avoid the trap. Although some people use it differently, you should know that certain behaviors can help you maintain responsibility.

Rules Credit Card Owners Should Follow

Pay the Entire Balance Each Month

Although it may sound impossible at first, you should know that paying everything before the due can provide you with numerous benefits. You should handle the balance before the due to prevent interest from affecting the rest of the money. By learning the habit of handling everything completely each month, you will give yourself an interest-free loan each month.

The moment you decide to carry the balance into the next month, you will get a higher amount and pay the interest. That may lead to a snowball reaction and effect, meaning you will end up handling larger and larger balances as a result. That is the worst debt trap people can enter, which is why you should avoid it altogether.

Avoid Making Only Minimum Payment

In case you have a balance you must consider, the next step is to pay as much as you can above the minimum payment. Choosing only a minimum amount is the fastest way to enter a debt trap, which is why you should avoid it altogether. Remember that it is challenging to pay the minimum, handle the accumulated interest on debt, and make additional purchases.

That way, you will enter the vicious and never-ending cycle that will affect your financial situation. The worst thing you can do is enter a perpetual cycle where you pay and pay but cannot repay the entire balance and free yourself from debt.

Avoid Using Cash Advances

One of the biggest promotional aspects for credit card companies is to offer you a chance to gain access to fast cash on ATMs a. However, that is the worst thing you can do. In all situations, credit card cash advances will feature a more significant interest rate than the amount you pay while purchasing.

At the same time, you will not get the grace period for repayment, but the interest will accrue the amount you take as soon as you do it. The interest rate on purchases is not as high as taking money from an ATM through a credit card, which is something you should avoid.

Tackle the Debt Strategically

Although you may not be able to follow the first rule mentioned above, which is handling the entire balance each month, which may cause you to enter severe stress, numerous US citizens decide to carry balances from one billing period to another.

Therefore, you can accumulate a specific debt you must pay to free yourself. It is vital to act as strategically as possible. For instance, if you have a few cards with balances combined with other payments you must make each month, including a car loan, we recommend you prioritize the payments as much as you can and decide which one is the most important.

Check out this guide: kredittkortinfo.no/kredittkort-reise/ to learn more about credit cards. We can differentiate numerous getting out of debt strategies, while the most popular and effective one is to pay as much as you can by tackling the smallest balances first. That way, you can start paying off the ones you owe the least while moving to the next smallest balance.

Other professionals state that you should repay the one with the highest interest rate first, which may prevent further expenses. The main idea is to choose the wise strategy and follow it throughout the process, which will help you get out of debt. Another important consideration is to avoid using the cards until you handle everything.

Keep the Balance Below Thirty Percent of the Limit

One of the most important factors for ensuring you boost your credit score and rating is the credit utilization ratio. We are talking about the percentage of available credit that you wish to use. The main goal is to manage the balance on each card, which will help you ensure the ratio is in perfect line.

You should keep it below thirty percent, meaning if your limit is thousand dollars, you should only use three hundred and pay it by the due. Keeping the utilization ratio below thirty percent is a better solution. People who had the biggest scores had seven percent utilization ratios, which is important to remember.

Limit the Types of Purchases

You should consider using a credit card for a few purchases a month, which should be the normal aspect of your budget. For instance, you can pay for gas or something else. On the other hand, you can pay the utility bill with it and pay it off before the next billing date.

However, if you cannot control your spending, you should get the basic card without annual expenses. At the same time, you should only use it for a few expenses like a Netflix subscription or internet bill. The idea is to set up a pull payment by using a checking account, then put it away and avoid using it.

The card will be active, and you will only use a small part of the limit while making on-time, automatic payments through the account. That will keep you out of debt and build your credit.

Secured Credit Card

Another solid option that will help you prevent further expenses is by using a secured solution. It means you should put in a deposit that will act as a credit limit. Therefore, when you deposit a thousand dollars, that will act as your limit. Since you will make a deposit, an issuer will not have a risk, meaning you will get approved without the prior record.

Since the company will send the statements to credit bureaus, this card is perfect for building credit. It is perfect for first-time users, students, and people with no borrowing history.