Best Business Loan Interest Rates in India? It is impossible to run a business without proper funding, whether it is on a small scale or on a large scale.
The free flow of cash is required not only for investment purposes but also in the form of working capital. Businessmen often have enough cash when needed
In addition, the amount of money required depends on the scale of investment from time to time. Entrepreneurs generally prefer to keep their cash and borrow at a lower interest rate. Business loans from financial institutions. Know about Which is the Best personal loans Companies.
Best Business Loan Interest Rates in India
| Bank | Business Loan Interest Rates | Processing Fee |
|---|---|---|
| SBI Business Loan Rates | 11.20% | From 2% to 3% |
| HDFC Bank Business Loan Rates | 15.65% | Starting from 0.99%, Max 2.50% |
| ICICI Bank Business Loan Rates | 16.49% | Starting from 0.99%, Up to 2% |
| RBL Bank Business Loan Rates | 16.25% | 1.80-2.20% of the loan amount |
| Tata Capital Business Loan Rates | 21.00% | From 1.50% to 2.50% |
| Lendingkart | 18.00% | 2% of the loan amount |
| Bajaj Finserv | 18.00% | Up to 2% of the loan amount |
| IDFC First Bank | 22.00% | 2.00% |
| IIFL | 16.00% | Up to 2% |
| Bank of Maharashtra | 14.50% | |
| IndusInd Bank | 14.00% | 2.50% |
| Kotak Bank | 16.00% | Maximum 2% of the loan |
| Fullerton India | 20.00% | 2% |
| ftcash | 18.00% | 2% of the loan amount |
| Indifi | 24.00% | 2 to 3% |
| Neogrowth | 19.50% | 2.5% of the loan amount |
| IDBI Bank | 12.25% | 1.00% |
| Allahabad Bank | 14.50% | Rs. 229 – per lac, Min Rs. 2,038 Max Rs. 22,928 |
| Yes Bank | 16.25% | Up to 2% |
| PNB | 12.65% | 1.8% + taxes |
| OBC | 12.65% | 0.50% of Loan Amount |
| Indian Overseas Bank | 14.90% | Rs. 204 per lakh |
| Dhan Laxmi Bank | 12.90% | |
| DCB Bank | 13.70% | 2% |
| Andhra Bank | 15.75% | Case to Case |
| United Bank of India | 13.00% | 1.15% |
| Corporation Bank | 13.55% | 1.5%, Min Rs. 500 |
| Syndicate Bank | 12.65% | 0.5%, Min Rs. 500 |
| Bank of Baroda | 14.10% | Up to 1.00% |
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Types of Business Loan Interest Rates
1. Reducing or Diminishing Balance Rate
The rate of reducing or reducing the remaining loan rate is calculated on the remaining loan amount. If you choose this type of option, the EMI includes interest that is payable for the outstanding loan amount for each month along with the principal repayment.
The good thing is that after each EMI payment, the outstanding balance of the loan decreases. Therefore, the interest rate for the subsequent month will only be the calculation of the interest applicable to the outstanding balance.
In this system, EMI is the interest rate that is to be paid every month in addition to the principal amount to be repaid.
In this process, the amount of loan borrowed decreases after each EMI payment. So the next month’s interest rate is calculated on the loan balance.
2. Fixed Rate of Interest
Fixed / flat interest rate calculated on the full loan amount during his tenure. Interest is charged without considering the fact that the monthly EMI will decrease in that principal amount, and hence the interest rate.
In this system, the EMI monthly payment is not reduced.
How to Get Better Business Loans Interest Rates?
- Prepare a self-written Business Plan
- Maintain financial stability along with good loan repayment history
- Improve CIBIL score up to 700 or above
- Improve your creditworthiness by paying bills and EMIs on time
- Should have decent source of income
- Apply for long-term business loan, instead of short-term
- Build relationship with bank, open account
- Do not close old accounts or credit cards
- Increase your company’s profitability
- Submit all the required documents – authentic and audited by CA
- Apply loan with top private or public sector banks
- Offer or submit valuable collateral or security, if required for secured business loan
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Documents required for Business Loans
- Signed Application Form
- Identity Proof (PAN)
- Residential Address Proof
- Last 3 years ITR (self and business), profit and loss account, balance sheets certified/audited by a CA.
- Last 12 months bank account statement (self and business)
- Certificate and Proof of Business Existence
- Business Profile
- Office address – ownership/ lease / rent agreement/ utility bill
Business Loans Eligibility
| Parameters | Business Loan Eligibility Criteria |
|---|---|
| Eligible Entities | Self-employed non-professionals – Sole proprietors, partnership firms, private limited companies, public limited companies involved in the business of manufacturing, trading, and services Self-employed professionals – Doctors, CA, CS, Architects. |
| Age | 21 – 65 years |
| Loan Amount | ₹ 50,000 to ₹ 100 Cr |
| Interest Rate | 13.50% – 24.00% |
| Loan Tenure | Up to 5 years |
| Business Vintage | For self-employed professional – 3 years For self-employed businessmen – 5 years |
| Annual Turnover | ₹ 1 Cr and above |
| Banking Stability | 6 months and above |
| CIBIL Score | 650 or above |
| Other Eligibility Conditions | The borrower should have a self-owned house or workplace |
Frequently Asked Questions
ANS:
1. IDFC First Bank Business Loans
2. ICICI Bank Business Loans
3. SBI Simplified Small Business Loans
4. Tata Capital Business Loan
5. IIFL Financial Business Loan
6. Bajaj Finserv MSME Loan
7. Axis Bank Business Loan
8. Fullerton India Business Loan
ANS: Around 3% to 7%
The average interest rate on a traditional small business loan is around 3% to 7%. Said, interest rates will vary among lenders, usually banks offer lower rates than alternative or online lenders
ANS: Whether your business requires short-term loans, intermediate-term loans, or long-term loans, Bajaj Finserv offers business loans up to Rs. 45 lakhs. You can use the loan amount to invest in infrastructure, expand operations, buy equipment or inventory, or even increase working capital.
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