Embarking on an entrepreneurial journey is an exhilarating endeavor, and securing the right financial support is the initial step for turning dreams into reality. A Personal Loan for Startups stands as the most convenient option to get financial backing, providing aspiring business owners with the essential funds to breathe life into their ventures.
Buddy Loan provides you the opportunity to meet the right startup lenders to suit your loan requirements. You can avail a personal loan from ₹15,000 to ₹15 lakhs at an interest rate of 9.99%.
Highlights of Instant Personal Loans for Startups
Ensure to be well-informed about the startup loan application process by understanding the vital aspects mentioned in the table.
| Interest Rates | Starting at 9.99%* p.a. |
| Loan Amount | ₹10,000 – ₹15 Lakhs |
| Loan Tenure | 6 months – 5 years |
*The interest rates mentioned are dynamic and subject to change based on your credit history and creditworthiness.
Interest Rates for Personal Loans for Startups
Before you apply for a startup loan, understand the interest rates while you choose the most cost-effective loan option that aligns with your startup’s financial capabilities. Here is the table that provides details on personal loans for startups.
| Processing Fee | Up to 5% of the loan amount |
| Fore-closure Charges | 2% to 5% |
| Penalty Charges | 2% of the due loan amount |
| Rate of Interest | 9.99%* p.a onwards |
*The interest rates mentioned are dynamic and subject to change based on your credit history and creditworthiness.
Eligibility Criteria
Knowing the startup loan eligibility when getting a loan will help you experience the hassle-free nature of loan application. This will also enhance the chances of a successful loan application. Refer to the table for your startup loan eligibility.
- Age: Must be between the ages of 21- 60 years.
- Credit Score: Your credit score should be more than 650.
- Nationality: Must be Indian.
- Startup plan: Applicants should have a business strategy.
Need to know your credit score? You can obtain it for free!
Documents Required
Here are the key documents needed to start the startup loan application process. Being well-prepared with the required documentation will ensure a smoother process for securing vital financial support.
- Photo Identity Proof: PAN, Aadhaar card, or passport.
- Address Proof: Documents like electricity bills, bank statements, or rental agreements.
- Income Proof of Co-signer: Must have a monthly income of ₹15000 or more.
- Bank statement: The co-signer’s most recent bank statement, which includes the account balance and a history of transactions.
- Photograph: Recent passport-sized photograph of the applicant.
EMI Calculation & Repayment
You can estimate your monthly repayments, evaluate the loan tenure, and make well-informed decisions, ensuring that the loan aligns with your financial needs for your startup.
Now you can calculate your EMI for your startup loan by using this specific formula by following the outlined steps.
Your Amortization Schedule (Yearly/Monthly)
Example:
P = ₹5,00,000
Annual interest rate = 11.99% p.a
R = 11.99% / 12 / 100 = 0.0099
Loan tenure in years = 5
Number of monthly installments (n) = 5 * 12 = 60.
Now, let’s substitute these values using the personal loan EMI calculatorp formula:
EMI = [500000 × 0.0099× (1 + 0.0099)^60] / [(1 +0.0099)^60) – 1]
EMI = ₹11,120
Hence, assuming a startup loan of ₹5 lakhs at an interest rate of 11.99% for a tenure of 5 years, representing your monthly repayment amount.
Comparison of Loan Lenders for Startups
The table below summarizes banks providing loans for startups along with various NBFCs. Refer to the table to know about SBI startup loan interest rates to trusted NBFCs like LoanBaba:
| Loan Lenders | Interest Rate (p.a.) | Processing Fee |
| State Bank of India | 10% onwards | Up to 1.5% |
| Central Bank of India | 11.25% onwards | Up to 1% |
| Federal Bank | 10.49% onwards | Up to 3% |
| IDBI Bank | 11% onwards | Up to 1% |
| Bajaj Finserv | 10% onwards | Up to 4.13% |
| Pocketly | 24% onwards | Up to 9.4% |
| Loanbaba | 10.5% onwards | Up to 5% |
| HDFC Bank | 9.99% onwards | Up to ₹6,500 |
| ICICI Bank | 9.99% onwards | Up to 2% |
| Axis Bank | 9.99% onwards | Up to 2% |
| Tata Capital | 10.99% onwards | Up to 5% |
| L&T Finance | 10.5% onwards | Up to 4% |
Note: The interest rates mentioned are subject to change. Do visit the website for more information.
Types of Loans Offered for Startup
From working capital to equipment financing, discover the funding options essential for nurturing and propelling your startup to success. Here is the list of types of loan offered for startups.
- Working Capital Loan: this type of short-term loan provides up to Rs. 40 lakh for daily business needs and expansion. This aims to enhance cash flow, purchase raw materials, and aid in business growth.
- Term Loan: this type of loan is collateral free, and provides loans up to ₹2 crores with a repayment tenure ranging up to 5 years. It supports short to long-term financial needs with collateral-free options.
- Letter of Credit: this start-up loan provides funding assurance for international trade transactions and aims to enable secure transactions with unknown overseas suppliers.
- Overdraft Facility: this type of start-up lender allows withdrawal even with zero account balance. Hence, providing flexibility and immediate access to funds as needed.
- Equipment Finance or Machinery Loan: funding for purchasing or upgrading equipment/machinery. Equipment finance is used mainly by large enterprises and enterprises in the manufactured sector.
- Loans under Govt. Schemes: various loan schemes started by the Government of India to provide financial support for individuals and businesses, aiding growth.
- Point-of-Sale (POS) Loans: provides cash advances based on future credit/debit card transactions. Provides help for short-term cash crunches for SMEs with convenient repayment tied to POS transactions.
Features and Benefits
A personal loan for startups can help entrepreneurs access funds when they need additional financial support. These loans offer flexible repayment options, a relatively simple application process, and several benefits for eligible borrowers. Here are some key features to consider:
- Collateral-Free Financing: Most personal loans are unsecured, meaning eligible startup owners can borrow funds without pledging property, gold, or other assets as collateral.
- Flexible Loan Amounts: Depending on the lender, income, and creditworthiness, applicants can access different loan amounts to meet their financial requirements.
- Competitive Interest Rates: Personal loan interest rates depend on the applicant’s credit score, income stability, existing debts, and repayment history. A strong financial profile may help borrowers qualify for better rates.
- Convenient EMI Repayment: Many lenders offer repayment tenures ranging from 12 to 60 months. Borrowers can choose a suitable tenure to balance monthly EMI affordability with overall interest costs.
- Simple Online Application: Several banks and NBFCs allow applicants to submit personal loan applications online, upload KYC documents, and complete verification digitally.
- Quick Loan Processing: Digital verification and simplified application procedures can reduce approval times. However, loan disbursal depends on the lender’s eligibility checks and documentation requirements.
- Accessible to Self-Employed Individuals: Eligible entrepreneurs and self-employed professionals can apply using income tax returns, bank statements, business records, and other supporting financial documents.
- Predictable Monthly Repayments: Fixed-rate personal loans generally have consistent monthly EMIs, helping borrowers plan repayments alongside their regular financial commitments.
Personal Loan With Buddy Loan
Follow these quick steps to apply for your personal loan for startup with BuddyLoan:
- Step 1: Visit buddyloan.com or download & install the Buddy Loan app (Android or iOS)
- Step 2: Open the personal loan application page. Provide the mobile number and enter the received OTP.
- Step 3: Specify the desired loan amount. Next, choose the Personal Loan option
- Step 4: Choose the employment type (salaried or self-employed) and the salary mode (bank or cash).
- Step 5: Enter your work details (including company name, years of service and designation)
- Step 6: Enter your personal details (including full name, PAN, address, DOB & gender)
- Step 7: Provide your communication address and income details, and click the ‘Submit’ button.
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