Bologna
Jul 18, 2025

Personal Loan Vs Business Loan: Which One Should You Choose In 2025?

In 2025, the demand for quick, flexible, and digital financing solutions is at an all-time high. Whether you're an individual looking to cover medical or travel expenses, or a small business owner aiming to expand operations—both personal loans and business loans offer viable funding options.

But which one is right for you?

 This guide compares personal loans vs business loans across eligibility, interest rates, tax benefits, and use cases to help you make the best decision.


At a Glance: Personal Loan vs Business Loan

CriteriaPersonal LoanBusiness Loan
PurposePersonal use (medical, travel, etc.)Business-related needs (inventory, growth)
Collateral Required❌ No✅ Sometimes (varies by lender)
Interest Rates10%–36% p.a.9%–24% p.a.
Tenure12 to 60 months12 to 84 months
Loan Amount₹50,000 to ₹5,00,000+₹1,00,000 to ₹50,00,000+
Tax Benefits❌ No✅ Yes (under Sec 36(1)(iii))
Processing Time24–48 hours3 to 5 days (may vary)
Ideal ForSalaried or self-employed individualsBusiness owners, MSMEs, startups

Eligibility Criteria: Who Can Apply?

Personal Loan

  • Salaried or self-employed individuals

  • Monthly income of ₹13,500 or more

  • Age: 21–57 years

  • CIBIL Score: 600+ (or Experian 650+)

No business proof or GST registration needed.

Business Loan

  • Proprietors, partnership firms, Pvt Ltd or LLP companies

  • Minimum 1 year of business vintage

  • Minimum turnover (varies by lender)

  • GST returns, bank statements, ITRs required

A good option for business owners with proper documentation.


Interest Rates & Repayment Flexibility

  • Personal Loans usually come with fixed EMIs and higher interest due to unsecured nature.

  • Business Loans often offer larger amounts with lower rates and may include overdraft facilities, line of credit, or bullet repayments.

Tip: CP Advisor helps you compare rates from top lenders to ensure the best match for your profile. Apply Now


Tax Benefits: An Edge for Business Owners

  • Personal Loan: No tax benefit unless used for asset purchase like a home renovation (and documented properly).

  • Business Loan: Interest paid is eligible for deduction under Section 36(1)(iii) of the Income Tax Act.

Smart borrowers document all expenses and interest payments to reduce tax liability.


Use Cases: When to Choose What

Choose a Personal Loan if:

  • You need quick funds for emergencies, travel, weddings, or medical bills.

  • You’re a salaried professional with no business background.

  • You want a paperless, fast-track loan with minimal documentation.

Apply online at CP Advisor and get disbursal within 24–48 hours.


Choose a Business Loan if:

  • You run a registered business and want to expand, buy inventory, or invest in marketing.

  • You can show income documents like GST, ITR, or bank statements.

  • You're looking for larger amounts and longer tenure.

Get the right loan product for your business needs from trusted lenders via CP Advisor.


Final Verdict: Which Loan Is Better in 2025?

You Should ChooseIf You…

Personal LoanNeed quick funds for personal use, have no business proof
Business LoanRun a business and want tax-deductible, high-value funding


✅ Why Borrow Through CP Advisor?

  • Loan comparison from top NBFCs & banks

  • Instant eligibility check

  • Transparent charges, zero hidden fees

  • Trusted partners like IIFL, MoneyView, Bajaj Finserv, and more

www.cpadvisordigital.in | ? +91 82002 41300


Still unsure? Get a free loan consultation from our experts.


 Click here to Apply Now and choose the right path to funding!