A Business Loan with Attractive Rates
All businesses require sufficient capital to support operating costs and/or expansion. As a result, business owners seek out Business Loans to obtain the funds they want. Businesses can pick a 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, irrespective of business size. Our term loan interest rates are among the best in the industry.
The interest rates & charges applicable on this loan are one of the most important factors to look out for when borrowing. Paying a high rate of interest increases your debt. Poonawalla Fincorp’s business financing helps avoid such a problem by offering the best interest rates and charges.
Interest Rate, Fees & Charges
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Interest rate Keep loan repayments affordable and within budget by getting the Poonawalla Fincorp Business Loan, which depends 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. |
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Processing fees Poonawalla Fincorp 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. |
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Pre-payment charges Pre-paying a debt is a smart way to save on payment of additional charges, thereby keeping the overall costs low. With Poonawalla Fincorp’s Business Loan, you can prepay the loan at your convenience. However, please note you may need to pay a nominal charge of 5% on principle outstanding plus applicable taxes for prepaying/ foreclosing the loan. Additionally, for part payments, you may need to pay a nominal charge 5% on principle partly paid amount plus applicable taxes. |
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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 ₹500 per bounce, plus taxes as applicable |
EMI Calculator
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EMI Amount = *
Interest Rate
Rate of Interest starting from 15%* per annum| One-time Processing Fee up to 3% of sanction amount plus applicable taxes.
Repayment
Flexible repayment tenure from 6 months to 48 months.
Example
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 is an important step in determining the total cost of borrowing. However, calculating the interest rate for 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)]
Where,
○ 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 interest rates and repayment terms from different lenders. Additionally, you can use Poonawalla Fincorp’s EMI calculator to find out the best interest rate for your loan and make informed decisions about your borrowing needs.
Schedule of Charges & Other Features
| Interest Rates | 15% p.a onwards |
| Loan Amount | ₹5 Lakh to ₹75 Lakhs |
| Loan Processing Fees | Up to 3% plus applicable taxes |
| Lowest EMI per month | Starting from ₹2,783* per Lakh for 48 months |
| Loan Tenure | 6 - 48 months |
| Prepayment/Foreclosure Charges | 5% on principle outstanding plus applicable taxes |
| Default Charges | 24% per annum |
| Repayment Instrument Dishonor Charges | ₹500 per bounce plus applicable taxes |
| Stamp Duty | At actuals (as per state) |
| No Other Hidden Charges | |
Note: Default Charges: Penalty will be charged for non payment of EMI amount and for non-compliance of material terms and conditions, as more particularly specified at Default Charges.
Factors Affecting Interest Rate & Charges of a Loan for Business
When it comes to obtaining business financing, several factors can affect the interest rate and charges associated with the loan. Check out some of the top factors that affect interest rates and charges:
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Credit score
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Industry
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Market Conditions
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Business History & Vintage
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Loan Amount & Terms
- Credit Score: One of the most important factors affecting interest rates for a loan is your credit score. A credit score above 750 is considered excellent and can help you get a loan at 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 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 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 loan for your business 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 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 the 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:
| Pros | Cons |
| Saves on interest | Exerts a strain on cash flow |
| Reduces current liabilities | Attracts a foreclosure charge |
Frequently Asked Questions
Yes, you may have to pay a minimal processing fee to apply for a loan for your business.
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.
You can secure a loan for your business for a tenure of up to four years from 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 a 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, you can get a loan for business at competitive interest rates from Poonawalla Fincorp.
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 5% on principle outstanding plus applicable taxes on foreclosure or prepayment charge.
Lenders mainly consider some common factors, such as borrower’s age, credit score, business revenue, residential location, outstanding liabilities, etc. for calculating the interest rate.
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
