Factors Affecting Interest Rate and Charges of a Business Loan
Credit Score:
A credit score above 700 is considered excellent and can help you get quick loan approval.
Business History and Vintage
Having a profitable business and a minimum business vintage of 2 years helps you get a loan at a competitive interest. rate
Industry
Different industries have different risk profiles, which are taken into account when interest rate is set.
Loan Amount and Terms
The amount of the loan and the repayment term can also affect the interest rate and charges.
Market Conditions
Market conditions can also affect interest rate if they are variable.
Fixed interest rate do not change according to market conditions; they remain the same throughout the loan tenure. Floating interest rate tend to change according to prevailing market trends.
Interest Rate and Charges
After 6 EMIs: 5% on principal outstanding + taxes
Default Charges: Penalty will be charged for nonpayment of EMI amount and for non-compliance of material terms and conditions, as more particularly specified at Default Charges.pdf
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Get a Business Loan at Competitive Interest Rate
Secure a Business Loan with the most competitive and favourable interest rate. Enhance your business growth while saving more on the overall borrowing cost.
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Enter your DOB, PAN card number, monthly income, and residential details.
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Upload the necessary documents for quicker approval.
On successful verification, the loan amount will be disbursed into your bank account instantly.
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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. 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 4 years from Poonawalla Fincorp.
You can get a loan at competitive interest rate if you fulfil these criterias:
· You must be between 24 and 65 years (during loan maturity).
· You must have a business vintage of at least 2 years.
· Your business must have a minimum annual turnover of ₹6 Lakh.
· You must have a minimum credit score of 700.
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.
Yes, there is a fee for prepaying a Business Loan. If you choose to prepay the loan within the first 6 EMIs, you will be charged 6% on the principal outstanding plus taxes. If you decide to prepay the loan after the first 6 EMIs, the fee will be 5% on the principal outstanding plus taxes.
When calculating the interest rate, lenders mainly consider some common factors, such as the loan amount, tenure, your age, credit score, business revenue, residential location, outstanding liabilities, etc.
Here are some tips that may help you minimise the interest rate:
1. Improve Your Credit Score: A higher CIBIL score helps you secure a Business Loan at better interest rates. If you have a credit score below 700, pay your EMIs on time, have a mix of multiple credits and keep your credit utilisation below 30% to improve it.
2. Choose a Shorter Loan Term: Opting for a shorter repayment term minimises the lending risk. Hence, it may lead to lower interest rate.
3. Provide a Strong Financial Statement: If your financial statements show profits, you may secure a Business Loan at lower interest.
4. Negotiate Terms: Having a good relationship with the lender helps you negotiate for better interest rate.
5. Refinance Your Loan: Refinancing means replacing your existing debt with a new one at better interest rate. It helps minimise the overall borrowing cost.
Explore Different Types of Business Loans to Suit Your Needs
Happy Customers, Happy Us
I opted for a Loan Against Property balance transfer with Poonawalla Fincorp, and the experience exceeded my expectations. The application process was completely digital, quick, and required minimal paperwork. Getting a significantly lower interest rate helped me reinvest in my business. With better financial flexibility, I was able to scale operations efficiently, leading to a 30% increase in business turnover. Poonawalla Fincorp made the entire journey stress-free, and I highly recommend their services to any business owner looking for smart financial solutions.
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I had a great experience with Poonawalla Fincorp’s Pre-owned Car Loan. The offered loan amount was as per my expectations, and the entire process was smooth and hassle-free. The documentation was minimal, and the loan was disbursed in just two days! What stood out was the flexibility—repayment was easy, and the EMI structure was well-planned. The loan approval process was straightforward, making it convenient to get the car I wanted without any delays. Overall, the service was excellent, and I highly recommend Poonawalla Fincorp to anyone looking for an easy and quick loan process!
A friend in need, is a friend indeed. Poonawalla fincorp has been like one of those friends for me, who has supported me in my journey. With no hidden charges and no prepayment charges, the company has provided me with the adequate funds I needed for me professional practice. From the loan application process to the disbursal of funds, I did not face any problems. My experience was hassle-free and smooth. Not just me, all my fellow professionals and friends have had a wonderful experience with Poonawalla Fincorp’s Professional Loan.
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