A Business Loan with Attractive Rates
All business requires sufficient capital to support operating costs and/or expand. As a result, business owners seek out Business Loans to obtain the funds they want. Businesses can pick a Business Loan from a range of loan provider choices. Traditional bank loans are the most common form of capital, however, obtaining a bank loan is not a straightforward process.
At Poonawalla Fincorp, we have an easy and simplified process and offer competitive interest rates on an unsecured Business Loans, irrespective of business size. Our term loan interest rates are among the best in the industry.
The interest rates & charges applicable on a Business Loan are one of the most important factors to look out for when borrowing. Paying a high rate of interest increases your debt. The Poonawalla Fincorp Business Loan helps avoid such a problem by offering the best Business Loan interest rates and charges.
Poonawalla Fincorp Business Loan: Interest Rate, Fees & Charges
Keep loan repayments affordable and within budget by getting the Poonawalla Fincorp Business Loan. Depending on factors like your credit score, financial standing, experience etc. You can receive an interest rate as low as 15%* p.a., enabling business owners to access additional capital cost-effectively.
The Poonawalla Fincorp Business Loan has a one-time nominal processing fee up to 3% plus applicable taxes. This applies to the disbursement amount and is charged as an administrative fee for handling loan processing.
Pre-paying a Business Loan is a smart way to save on payment of additional interest, thereby keeping the overall costs low. With Poonawalla Fincorp’s Business Loan, you can prepay at your convenience and are not required to pay any fee for the same. This is because we levy zero prepayment charges on our Business Loan if paid from own sources. This helps you maximize your savings and focus on your business.
|Late payment penalties
Defaulting on loan EMIs attracts a penalty and penalty charges are mentioned below:
Also, in case of cheque bounce there will be a charge ₹1,000 per bounce, plus taxes as applicable
Business Loan Interest Rate Calculator
Rate of Interest starting from 15%* per annum| One-time Processing Fee up to 3% of sanction amount plus applicable taxes.
Flexible repayment tenure from 6 months to 36 months with zero pre-payment charges.
Loan Amount: ₹10 Lakh, Interest Rate: 15%, Tenure: 3 years, equates to EMI of ₹34,665 per month.
How to Calculate Business Loan Interest Rate
Calculating the interest rate for a Business Loan is an important step in determining the total cost of borrowing. However, calculating the interest rate for a Business Loan can be complex, especially if you are dealing with different loan types or lenders.
The interest is calculated as per the following formula:
E = [P x R x (1+R) N] / [(1+R) (N-1)]
○ P = Principal or the loan amount
○ R = Monthly interest rate (annual interest rate/12)
○ N = Number of monthly instalments (loan tenure)
Before you come to a decision, it is important to look for and compare Business Loan interest rates and repayment terms from different lenders. Additionally, you can use Poonawalla Fincorp’s Business Loan EMI calculator to find out the best interest rate for your loan and make informed decisions about your borrowing needs.
Business Loan – Schedule of Charges & Other Features
|Business Loan Interest Rates||15% p.a onwards|
|Loan Amount||₹1 Lakh to ₹50 Lakhs|
|Loan Processing Fees||Up to 3% plus applicable taxes|
|Lowest EMI per month||Starting from ₹3,467* per Lakh for 36 months|
|Loan Tenure||6 - 36 months|
|Prepayment/Foreclosure Charges||0%* If paid from own sources|
|Default Interest||3% per month|
|Repayment Instrument Dishonor Charges||₹1000 per bounce plus applicable taxes|
|Stamp Duty||At actuals (as per state)|
|No Other Hidden Charges|
Factors Affecting Business Loan Interest Rate & Charges
When it comes to obtaining a Business Loan, several factors can affect the interest rate and charges associated with the loan. Check out some of the top factors that affect Business Loan interest rates:
Business History & Vintage
Loan Amount & Terms
- Credit Score: One of the most important factors affecting Business Loan interest rates is your credit score. A credit score above 750 is considered excellent and can help you get lower interest rates on your Business Loan. results in a lower interest rate.
- Business History & Vintage: Lenders will also take into account the history of your business and the number of years it has been operational. If you have a strong track record of profitability and growth, you can get a low-interest Business Loan easily.
- Industry: Different industries have different risk profiles, which are taken into account when interest rates are set.
- Loan Amount & Terms: The amount of the loan and the repayment term can also affect the interest rate and charges. You can use the Poonawalla Fincorp Business Loan EMI Calculator to know your loan amount, EMI, interest rate, and loan tenure.
- Market Conditions: Market conditions can also affect interest rates if they are variable. Floating interest rates tend to change according to prevailing market trends. Overall, many factors can affect Business Loan interest rates and charges. Hence, it's important to understand these factors and work to improve your credit score and business history to secure the most favourable loan terms possible.
Types of Business Loan Interest Rates
Fixed Interest Rate
Fixed interest rates, as the name suggests, are fixed for the entirety of the loan tenure. The borrower is required to pay the same EMI amount each month. What’s more, fixed interest rates are more reliable in the long run as you can be assured that the rate will not change throughout the loan tenure. It also makes it easier for you to calculate your monthly EMI amount. So, if you are looking for the best Business Loans at low-interest rates, apply now with Poonawalla Fincorp.
Floating Interest Rate
Floating interest rates can change as per existing market conditions, which means the loan EMI amount to be paid every month can differ. Since the rate can differ according to prevalent trends, this type of interest rate can also affect your loan repayment capabilities if your business is relatively new. Nevertheless, floating interest rates can also be on the lower side and further lower your EMI amount. Hence, to find the best Business Loan offer at attractive interest rates, simply apply with Poonawalla Fincorp.
Tips to Prepay a Business Loan to Reduce Interest Rates and Charges
Prepayments of a Business Loan can save you lots of money in terms of loan interest to be paid. However, it is important to take note of various aspects before taking the decision to prepay your loan. Check out these tips to prepay a Business Loan effectively:
Identify the ideal time for loan repayment through projected cash flow calculation.
Avoid prepayments during the leaner months in the business cycle.
Refer to the amortization schedule before prepaying.
Check for any prepayment penalties which are applicable.
Pros and Cons of Foreclosing a Business Loan
Foreclosure refers to the prepayment of the loan amount before the end of loan tenure. However, foreclosure isn’t always a smart decision, and business owners should know the advantages and disadvantages of such decisions.
Below is a table on Pros and Cons of foreclosing a loan for easy reference:
|Saves on interest||Exerts a strain on cash flow|
|Reduces current liabilities||Attracts a foreclosure charge|
Frequently Asked Questions
Yes. Prepaying the Poonawalla Fincorp Business Loan can be done at a minimal fee. You only need to pay 5% of the outstanding principal, plus applicable taxes.
No. There is 0%* foreclosure or prepayment charges if paid from own sources.
This is an undertaking when borrowers prepay the entire debt in a single payment before the end of the tenure. As a business owner, foreclosing the loan can be a smart option when you have the capital to do so. It helps you save on interest payments and become debt-free.
The Business Loan’s maximum tenure is three years at Poonawalla Fincorp. Hence, you are provided with the flexibility to pay your loan according to your business’s cash flow.
- Getting a competitive Business loan interest rate in India is not an easy task but it can be simplified if a person fulfils the eligibility criteria for getting the Business Loan. The criteria have been specified below:
- Age must be between 24 and 65 years (during loan maturity)
- Applicant must have a business vintage of at least two years
- Business must have a minimum annual turnover of ₹6 Lakh
- Have an excellent credit score
Yes. Poonawalla Fincorp offers a competitive Business Loan interest rate in India, and you can get the loan approved at the lowest rate of interest as per the terms and conditions in Poonawalla Fincorp’s internal policy.
Yes. You will have to pay an additional amount in taxes when paying the processing fee, making prepayments, or when you pay the penalty for defaulting on EMIs.
No. At Poonawalla Fincorp, there is 0%* foreclosure or prepayment charge if paid from own sources.
Lenders mainly consider some common factors, such as borrower’s age, credit score, business revenue, residential location, outstanding liabilities, etc. for calculating the Business Loan interest rate in India.
A term loan is a type of loan provided by financial institutions or lenders to borrowers for a specific period, typically with a fixed interest rate. The borrower receives a lump sum amount upfront and repays the loan over the agreed term through regular instalments. The term loan may be used for various purposes, such as financing business expansion, purchasing equipment or property, or funding a large project. For example, a manufacturing company may obtain a term loan to purchase new machinery to increase production capacity. The loan is then repaid over several years with interest. The terms and conditions of the term loan, including the repayment schedule and interest rate, are agreed upon between the borrower and the lender before the loan is disbursed.
*Terms & Conditions Apply