A Business loan interest rate could directly impact the cost of capital for a business initiative. These rates vary depending on factors such as the lender, loan amount, tenure, and the applicant's creditworthiness. The interest rates influences periodic cash outflows, could help in enhancing financial performance and cost efficiencies.
Let’s uncover different rates that banks, NBFCs, and government schemes, detailing amounts, terms, and influencing factors have to offer you over a business loan. Through it, you can start your business loan journey with tips on securing favourable rates, emphasising credit scores and negotiation.
Here are the business loan details offered by banks and NBFCs:
Loan Amount | Up to ₹1 Crore |
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Interest Rate | 9.25% - 30.00% p.a. |
Tenure | Up to 96 months |
Processing Fees | Up to 3% |
Prepayment Fees | Up to 4% |
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It is crucial to compare business loan interest rates offered by different lenders. As it will help business owners find the best financing option for their business. Here are the various banks and NBFCs offering business loans along with their interest rates:
Check the business loan interest rate offered by different banks from the table below.
Banks | Interest Rates (p.a.) | Loan Amount (₹) | Tenure |
---|---|---|---|
Axis Bank | 9.25% - 20.00% p.a. | ₹50,000 - ₹75 lakhs | 6 - 60 months |
HDFC Bank | 10.75% - 22.50% p.a. | Up to 75 lakhs | 12 - 48 months |
ICICI Bank | 12.50% - 13.60% p.a. | Up to ₹2 Cr | Up to 7 years |
State Bank of India | 8.90% p.a. onwards | Up to ₹50 Cr | Up to 15 years |
South Indian Bank | 9.80% p.a. onwards | Up to ₹1 Cr | Up to 60 months |
RBL Bank | 10.00% p.a. onwards | ₹10 Lakhs - ₹50 Lakhs | Up to 48 months |
Karnataka Bank | 10.43% p.a. onwards | Up to ₹15 Cr | Up to 120 months |
Federal Bank | 10.75% p.a. onwards | Up to ₹2 Cr | Up to 120 months |
IDFC First Bank | 15.00% p.a. onwards | ₹9 Lakhs to ₹100 Lakhs | 12 to 48 months |
Yes Bank | 15.99% p.a. onwards | Up to ₹75 Lakhs | Up to 7 years |
Jana Small Finance Bank | 9.25% - 28.00% p.a. | ₹30,000 - ₹1 Lakh | 12 - 60 months |
Ujjivan Small Finance Bank | 17.00% - 19.00% p.a. | ₹3 lakhs - ₹25 lakhs | 36 - 120 months |
Utkarsh Small Finance Bank | Up to 22.00% p.a. | ₹3 lakhs - ₹10 lakhs | 12 - 48 months |
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Note- The interest rates are dynamic and subject to change based on your creditworthiness and prevailing market rates. Please check the official website for more accurate information.NBFCs | Interest Rates (p.a) | Loan Amount (₹) | Tenure |
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Mahindra Finance | 7.2% - 22.00% p.a. | ₹1 lakh - ₹25 lakhs | 12 - 48 months |
Bajaj Finserv | 9.75% - 30.00% p.a. | ₹2 lakhs - ₹80 lakhs | 12 - 96 months |
IndiaLends | 10.25% - 29.99% p.a. | Up to ₹1 Crore | 12 - 60 months |
LendingKart | 12.00% - 46.5% p.a. | ₹50,000 - ₹2 Crore | 1 - 36 months |
IIFL | 12.75% - 44.00% p.a. | Up to ₹30 lakhs | Up to 60 months |
Aditya Birla Finance | 14.00% - 21.00% p.a. | Up to ₹25 Crore | 12 - 48 months |
Kredit Bee | 18.00% - 29.95% p.a. | ₹1000 - ₹4 lakhs | 3 - 24 months |
Indifi | 18.00% - 30.00% p.a. | ₹50,000 - ₹50 lakhs | 12 - 36 months |
Flexiloans | 12.00% p.a. onwards | ₹50,000 - ₹1 Crore | Up to 60 months |
Incred | 14.5% p.a. onwards | ₹1 lakh - ₹10 Crore | 12 - 36 months |
Shriram Finance | 15.00% p.a. onwards | ₹1 lakh - ₹30 lakhs | 12 - 60 months |
TATA Capital | 15.00% p.a. onwards | ₹40,000 - ₹75 lakhs | 12 - 60 months |
Protium | 18.00% p.a. onwards | Up to ₹30 lakhs | Up to 24 months |
mCapital | 24.00% p.a. onwards | Up to ₹15 lakhs | 12 - 36 months |
Ambit Finvest | As required | Up to ₹50 lakhs | Up to 36 months |
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Note- The interest rates are dynamic and subject to change based on your creditworthiness and prevailing market rates. Please check the official website for more accurate information.Government business loan schemes offer financial assistance to entrepreneurs and businesses at competitive interest rates. These schemes aim to promote entrepreneurship, job creation, and economic growth by providing affordable funding options to eligible borrowers. Government business loan schemes offer lower interest rates than traditional lenders helping women entrepreneurs and others get access to capital for small and medium-sized enterprises (SMEs) to encourage their development and expansion.
These loan schemes offered by the government are:
Loan schemes | Interest Rates (%) | Loan Amount (₹) |
---|---|---|
Pradhan Mantri Mudra Yojana | 8.00% p.a. onwards | ₹50,000 to ₹10 lakhs |
CGTMSE | 8.00% p.a. onwards | ₹500 lakhs onwards |
Udyogini Scheme | 10.00% - 12.00% p.a. | Up to ₹3 lakhs |
PSB loans in 59 minutes | 6.8% p.a. onwards | ₹10 lakhs to ₹5 Cr |
Stand Up India Scheme | The rate must not exceed the MCLR + 3% + tenor premium. | ₹10 lakh to ₹1 Cr |
SBI Stree Shakti Loan | Loans up to 2 lakhs follow the prevailing lending rate, with a 0.5% concession for higher amounts. Some cases qualify for a 5% concession. | Up to ₹25 lakhs |
Pradhan Mantri Rozgar Yojana (PMRY) | 12.00% p.a. | Up to ₹10 lakh |
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Note- The interest rates are dynamic and subject to change based on your creditworthiness and prevailing market rates. Please check the official website for more accurate information.Not sure of your credit score? Check it out for free now!
Unsecured business loans are a type of financing option where borrowers do not need to provide any collateral or security to obtain the loan. These loans are based on the borrower's creditworthiness and business performance rather than assets. Government schemes like Mudra loan, Udyogini, Stand Up India Scheme and others offer collateral-free business loans to support micro, small and medium businesses and women entrepreneurs. These schemes aim to promote entrepreneurship and economic development by providing financial assistance without any need of collateral.
Lending partners of Buddy Loan also offer unsecured business loans to borrowers. Lenders like Paysense, SBI, Fibe, Axis Bank, KreditBee, Standard Chartered, and others provide competitive interest rates and extended repayment periods for business loans. These loans provide flexibility and convenience for businesses looking for quick financing without the need for collateral.
A Business Loan EMI Calculator is a tool that helps business owners understand their loan repayment obligations. It allows them to estimate how much they'll need to pay each month towards their loan, through factors like the loan amount, interest rate, and repayment period.
Understanding the EMI helps in planning their budget effectively and managing cash flow. With the calculator, they can compare different loan options easily, assess affordability based on their financial situation, and decide on the repayment period that works best for them. By using this tool, borrowers running businesses can plan their repayments and choose the right financing options.
To use it, simply input the loan amount, interest rate and tenure and you will get the estimated EMI for your loan amount and duration.
For example, if borrow a loan amount of ₹. 50,000 at 11% interest for 1 year, your repayment amount is nothing more than ₹. 53,029/- for a monthy EMI of ₹. 4,419/-
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Several factors can influence business loan interest rates which can in turn impact the cost of the business loan. Here are some of which can directly impact the cost of capital and cash flows,
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It is always great to get a good deal out of a loan, especially if you are a business owner. Here are some tips on how to get a lower interest rate on your business loan:
Getting a business loan is now possible from Buddy Loan, here are the easy steps that you can follow:
Step 1: Visit buddyloan.com or Download & install the Buddy Loan app (Android or iOS).
Step 2: Open the business loan application page. Enter your mobile number and OTP.
Step 3: Specify the desired loan amount and email. Next, choose the Business Loan option.
Step 4: Choose if you have a Business Proof (Yes/ No)
Step 5: Provide income details and Click the ‘Submit’ button.
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A credit score has a major impact on business loan interest rates, as it indicates how responsible a borrower is when repaying back a loan. Here is how a credit score can impact the business loan interest rates:
Lower credit scores may also limit loan options or require collateral for security. Thus, maintaining a good credit score is crucial for businesses to secure favourable loan terms and lower borrowing costs.
You can get the lowest interest rate on a business loan by having a good credit score, providing collateral or having a shorter tenure.
The repayment period from a business loan is anywhere between 6 months to 120 months.
The pre-closure or foreclosure charges for business is up to 3%.
You can calculate your interest or EMI by using the EMI calculator. All you need to do is input the available slots and click calculate.
Lenders can charge a fee of up to 4% on early repayment of a business loan.
Yes, if you have an excellent credit score, you can negotiate for better interest rates.
Yes, generally prepaying business loans will incur a penalty of up to 4%
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