It is commendable that you want to start your own business. While I can’t help with the angel investing bit of it, I suggest you try for a personal loan.

Personal loan
A personal loan is an unsecured loan that is taken by an individual from a bank or a non-banking financial company (NBFC) to meet their personal needs. Unlike a home or a car loan, a personal loan is not secured against any asset. This means that you don’t have to give any collateral to the lender (bank/NBFC) and in case of a default, the lender cannot auction anything you own.

As the lender doesn’t hold any collateral against the amount it loans to you, the interest rates on personal loans are higher than those on home, car or gold loans because of the greater perceived risk when sanctioning them.
The criteria on which a personal loan can be given are: income level, credit and employment history, repayment capacity, etc.

For a personal loan, a borrower must have some regular source of income. You don’t necessarily need to be a salaried individual. Even a self-employed individual or a freelancer can avail of a personal loan.

Eligibility criteria for a personal loan:  

· The borrower should be in the age bracket of 21-58 years

· A salaried professional should have been at the current job for at least six months and must hold an experience of minimum two years.

· In case of a self-employed person, the minimum limit of work experience and the duration of business should be at least 2 or 3 years, or as per the lending institution’s protocols.

· The individual’s minimum income limit should be Rs. 20,000.

As is the case with all other loans, your eligibility for a personal loan, too, is affected by your credit history, length of service in your workplace, etc. While various lenders have their own eligibility criteria, the most important one is that of your credit score.

Credit score is a score, between 300 and 900, that is assigned to you based on the your payments towards your credit cards or loans. It is a way to identify your credit worthiness and helps banks or NBFCs decide whether they should lend to you or not. Although it is subjective, but a score above 800 is good or safe to lend to.

The score is based on the details of your financials and your repayment history gathered from your banks and credit card companies.

In India, there are three credit agencies that help give you your credit score-TransUnion, Experian and Equifax.

Once you have started your business, you can avail further loans by applying for a SME loan or what is known as a business loan.

Business loan

A business loan, like any other loan, is an amount lent by a bank or a non-banking finance company (NBFC). As the name suggests, the purpose of a business loan is to finance any requirement an individual may face in his/her business.

In such a situation, business loans can come in handy as they provide much-needed financial assistance to companies so that they can grow more competitively in their chosen markets. In other words, it is the financing you opt for to meet your urgent business needs. These needs can vary from expanding your existing business, to buying machinery, or boosting production, etc.

You can avail a business loan or an SME loan from various banks/NBFCs at attractive interest rates. You can avail of this loan without pledging any of your assets and get access to credit that can be repaid over a specific period of time.

· The borrower should be in the age bracket of 21-58 years
· A salaried professional should have been at the current job for at least six months and must hold an experience of minimum two years.
· In case of a self-employed person, the minimum limit of work experience and the duration of business should be at least 2 or 3 years, or as per the lending institution’s protocols.

Once you have started your business, you can avail further loans by applying for a SME loan or what is known as a business loan.