Call Anytime
Business Loan
As the name suggests, Business loans are given to businesses for short term funding of a business need. These are unsecured loan and hence are not backed up by any security, rather are given purely on the basis of Income of the business. The amount of loan is decided by bank on the basis of income of the customer.
The amount of loan is decided by bank on the basis of income of the customer and the purchase value as well as market value of the property. The property to be purchased should legally and technically be acceptable for the purpose of creating mortgage.
How much can I get?
The most important factor in a business loan is income eligibility and CIBIL SCORE in Business Loans.
Good CIBIL score & Good Repayment track record of existing Loans is the most important factor in Unsecured Business Loans.
Income Eligibility Banks and Institutions work on the basis of Income shown in the financials, however there are other products too under which loan can be extended where income shown in financials is not enough to extend a loan. There are various products to calculate loan eligibility like Banking Surrogate where average balance during the last 6 months decides how much loan can be extended. Other surrogate methods are GST turnover multiplier where income is determined on the basis of GST sales data of the last 1 year and applying industry margin to calculate the income.
What should I know about Interest Rates?
The interest rate on a Business loan is generally higher than all other secured loans.
The interest rate on the loans fixed for the entire term of the loan.
How do I pay back the loan?
The loan gets paid through regular monthly payments termed as EMI (Equated monthly installment). As the word equated suggests the payment remains equal for the entire term of the loan. EMI comprises of the interest payment and the principal payment. Depending on the loan tenure opted; the component of Interest keeps changing.
You can use our EMI calculator to calculate the EMI for any loan amount for a particular tenure on a given rate of interest.
The loan tenure for a commercial can be up to 4 years, depending on the age of the applicant.
The more the tenure of the loan, the higher is the component of Interest in each EMI. You can use our Amortization calculator to understand it better.
Can I pre-pay or foreclose my loan?
As business loans are on a fixed rate, most banks charge a penalty on any part-prepayment made during the loan tenure.
A penalty gets paid on foreclosure of the loan as well.
The penalty ranges between 2% to 4% of the loan amount.
Do I pay any charges while availing a loan?
All banks charge a fee from a borrower to process the loan application. The fee is termed as processing fees or administration charges.
The fees on a business loan ranges between 1% to 3% depending on the loan value, the borrower profile etc.
We help you negotiate best terms with the lender, hence we refund part or full fees to our borrowers making it a free processed loan for them.
What is the break up of Interest & Principal payment in each EMI?
Each EMI you pay for the repayment of the loan comprises of two components – Principal & Interest. The break up of these two components in each EMI depends on the loan tenure. The lower the loan tenure, higher is the principal payment in each EMI.
The break up can be best understood by making an amortization schedule of the loan.
Amortization refers to spreading payments over multiple periods. It is the paying off a loan with a fixed repayment schedule in regular installments over a period of time.
You can download the amortization schedule of any loan by using the amortization schedule calculator
Apply for a Loan Now