A business loan is a financial funding tool for business owners to address their planned or urgent expenses. As it is an unsecured financing option, you can opt for it without allocating any security or collateral. It is also known as Instant Business Loan.
The loan amount and interest rate for business loans usually vary between ₹50,000 to ₹20 Crore and 8.25% p.a. to 25% p.a, respectively. Business loans can be availed by business entities like private limited companies, self-employed professionals and non-professionals, and partnership firms.
Features of Business Loan
- High loan amount (Up to ₹20 Crore)
- Collateral or security free
- Flexible and high repayment tenure (Up to 60 years)
- Fast processing
- Fixed interest rate (usually ranges between 8.25% p.a. to 25% p.a.)
- Minimum documentation and paperwork
- Pre-approved offers are provided by lenders
Business Loan EMI Calculator
Format: 12m, 36m, 3y, 7y
Monthly Payment (EMI):
₹85.61
Total EMIs:
12
Total Payments:
₹1,027.29
Total Interest:
₹27.29
While deciding to take a business loan, you might have thought about a tenure period and loan amount. You might also have thought about how your monthly EMIs would look like. A business loan calculator will be helpful to you in such scenario.
Above is an online business loan calculator provided by us that contains 3 variables including interest rate, loan amount, and loan tenure. If you want to avail a business, this online calculator will be helpful to you in calculating business loan EMI.
Comparison of Business Loan
More than 20 lenders including banks, financial institutions, and credit unions offer business loans in India, and you can apply offline or online for availing a business loan. Various lenders provide a different loan amount range, tenure period, processing fees and charges, and interest rates.
Therefore, it is essential to go through business loan schemes of multiple lenders before opting one. Below is a comparison of top 10 business loan lenders of India along with required details.
| Bank/NBFC | Loan Amount | Tenure | Interest Rate | Processing Fee |
|---|---|---|---|---|
| HDFC Bank | Up to ₹50 Lakh | 1-4 Years | 10.00% p.a. onwards | Up to 2.0% of the loan amount |
| IIFL Finance | Up to ₹30 Lakh | 1-3 Years | 11.75% p.a. onwards | Up to 2.4% |
| Axis Bank | Up to ₹50 Lakh | 1-5 Years | 14.25% p.a. onwards | Up to 2.0% of the loan amount |
| IDFC First Bank | Up to ₹1 Crore | 1-4 Years | Contact the bank for this information | Contact the bank for this information |
| Kotak Mahindra Bank | Up to ₹75 Lakh | 1-4 Years | 16.00% p.a. onwards | Up to 2.0% of the loan amount |
| Fullerton India | Up to ₹50 Lakh | 1-5 Years | 17.00% p.a. onwards | Up to 6.5% |
| Bajaj Finserv | Up to ₹45 Lakh | 1-5 Years | 17.00% p.a. onwards | Up to 2.0% |
| RBL Bank | Up to ₹35 Lakh | 1-3 Years | 17.50% p.a. onwards | Up to 2.5% to 3.0% |
| ICICI Bank | Up to ₹2 Crore | 1-7 Years | 17.00% p.a. onwards | Up to 2.0% of the loan amount |
| Lendingkart Finance | Up to ₹2 Crore | 1-3 Years | 1.0% to 2.0% p.m. onwards | Up to 2.0% to 3.0% of the loan amount |
| Tata Capital | Up to ₹75 Lakh | Up to 3 Years | 19.00% p.a. onwards | 1%-2.5% of the loan amount |
Business Loan Eligibility
For opting business loans, you will need to fulfill the below mentioned business loan eligibility criteria provided by lenders:
| Eligibility Criteria | Requirements |
| Age of applicant | Min age: 21 years, Max age: 65-70 years (Age should be 70 years at the time of maturity) |
| CIBIL Score | 685 or higher |
| Nationality | Indian |
| Employment type | Self-employed, Private Limited Company, Proprietors, Partnership Firms |
| Business Vintage | In business for at least 3 years (profit making for the previous 2 years) |
| Turnover and profit | Minimum turnover- INR 40lacMinimum Profit (ITR)- INR 1.5lac (per annum) |
Documents required for Business Loan
The documents required for business loan disbursal are mentioned below:
- Identity Proof: Voter ID proof/ Aadhar Card/ Passport/ Driving License/ PAN Card
- Address Proof: Voter ID proof/ Aadhar Card/ Passport/ Driving License
- PAN Card: Required for Company/ Individual/ Firm
- Financial Documents: Bank Statement of previous 6 months, GST Returns, and other required documents
- Latest ITR along with Income Computation
- Profit & Loss Account and Balance Sheet for previous 24 months (CA Audited/Certified)
- Continuation Proof: ITR/Trade license/Establishment/Sales Tax Certificate
- Business Ownership Proof: Business Registration Documents
- Other mandatory documents.
Business Loan Interest Rates and Fees
Business loan interest rate currently ranges from 8.25% p.a. to 25% p.a. but may vary depending on the terms and conditions of the lender. Business loan interest rate may vary depending on multiple factors such as age of applicant, income of applicant, credit score, type of lender, RBI policies and guidelines, current market rates, internal policies, and many more.
Therefore, it is highly recommended to go through the terms & conditions of the lenders before opting one. You can also go through different lenders providing business loans to discover the lowest business loan interest rate option available for you.
Apart from the interest rate, you must also check out various fees and charges associated with the business loan online. These charges and fees mostly include:
- Processing fees (up to 3%)
- Goods and service tax (GST)
- Prepayment charges (may differ from lender to lender)
No prepayment applicable until repayment of 6 months
6-24 months- 4% of outstanding principle amount
25-36 months- 3% of outstanding principle amount
Above 36 months- 2% of outstanding principle amount - Late payment penalty or bounce charge for EMI (differs from lender to lender)
- Document processing charges (differ from lender to lender)
- Annual maintenance charges (differ from lender to lender)
- Verification Charges (differs from lender to lender)
- Stamp Duty and legal charges (as per applicable state laws)
Please read all T&C provided to you by your bank before availing a business loan. All supplementary fees and charges are mentioned there.