What is Business Loan
.
Business Loans are unsecured loan provided by Banks & NBFCs to support business of the people. It’s a credit facilities provided by Banks to fund a startup expenses or expansion of existing business. There are different types of business loans used for different kinds of needs of different businesses such as Working Capital Loan, Business Term Loan, Startup Loan, E-Commerce Business Loan, Invoice Financing Equipment Financing, Overdraft etc.
Benefits of Business Loan
Business Loans as compare to other loans has its own features and benefits
Interest is Tax Deductible
Interest which you pay on business loan is tax deductible. Since it is an additional amount paid by you to the bank which is paid out from your profit or income, it is eligible for a tax benefits.
Minimal Documentation
Unlike other loans, to get business loan you don’t need much documents to get the loan therefore it is easier and quick to get the business loan. Moreover, some banks offer door step services also.
Competitive Interest Rate
Since there is intense competition among banks to grow their own business, the interest rates are quite reasonable but interest rates may vary customer to customer basis depends upon credit worthiness, tenure and the purpose for which the loan is needed.
Collateral Free Loan
The Business Loan is an unsecured loan which means that the borrower does not have to provide any security or guarantee documents to the lenders but the property or land must be owned by the borrower to get 100 percent loan disbursement.
Business Loan Eligibility
Every Bank or NBFC providing business loan have different eligibility requirement and needs. Still there are some common criteria for all the Banks & NBFCs. Before applying it is advisable to check eligibility on Eligibility Calculator.
- 1. The applicant should be at least 21 years of age at the time of applying for loan & not older than 65 yrs of age at the time of loan maturity
- 2. The business should show profits in the past two financial years.
- 3. The business should have a minimum annual income of 1.5 lacs per annum
- 4. All financial documents like Profit and Loss Account, Balance Sheets and Computation of Income Statement should be audited by registered Chartered Accountant
Documents - Business Loan
- Photo ID Proof - Pan, Driving License, Passport & Voter ID
- Address Proof- Aadhar, Passport, Driving License, Voter ID, Utility Bills (Electricity Bill, Water Bill & Mobile Postpaid Bill) and Rent Agreement
- Bank Statement (Latest 6 Months) - Business Account, Current Account & Cash Credit Account
-
Proof of Business -
1. Incorporation Certificate, MOA, AOA for Private Limited Companies.
2. Sole Proprietorship or Partnership Deed for Partnership Firm.
3. Shop or Establishment Certificate of your Business. - Financial Documents of Business - Audited ITR, Computation of Income Statements, Balance Sheet, Profit and Loss Account, Tax Audit Report & Trading Account of Last 2 Years.
Points To Compare Before You Apply Personal Loan
Compare Interest Rates
It is always good to compare the offers of various Banks and NBFCs before you settle for one. Check and compare the interest rates on personal loan offered by various Banks and NBFCs to get the best and cheapest interest rates on Loans4Dreams.Com. Most banks offer completely fixed rate of interest for the entire tenure of the loan. Make sure that the personal loan that you are taking is also fixed for the entire tenure.
Processing Fees
Compare various banks processing fees on the business loan they offer. Most of the banks have processing fees ranging from 0.5 % to 3 % of the loan amount. Higher processing fees can result in significantly high cost on loan hence, it is important to compare rates for business loan on Loans4Dreams.Com and select the best offer.
Insurance Premium
Some banks may request you to get the insurance policy as it is an unsecured loan. Get the insurance policy which gives you adequate coverage at lowest premium.
Compare Prepayment and Foreclosure Compare Prepayment and Foreclosure
Everyone wants to repay his loan as soon as possible. Sometimes, you want to repay part of the loan i.e. part prepayment or you may want to repay entire loan amount before tenure. Banks levy prepayment or foreclosure charges ranging from Nil to 5 %. Hence, it is important to compare prepayment and foreclosure charges of various banks on Loans4Dreams.Com
FREQUENTLY ASKED QUESTION ON PERSONAL LOAN
Generally, processing fees for the business loan is 1-3 percent of loan amount
The Tenure of the business loan may vary from period of 01 month to 60 months
Some banks allow pre closure at no cost and Some banks levy pre closure charges between 2 to 5 percent of loan amount
And don’t worry, we will send you a reminder through email and admin notice banner of your WordPress dashboard.
EMI can be made on a biweekly or monthly basis
Generally, the minimum amount is 50 thousand rupees and maximum loan amount is 2 Crore rupees which may be extended depends upon customer profile.
BUSINESS LOAN INTEREST RATE COMPARISON OF BEST BANKS
| Bank | Business Loan Interest Rates | Processing Fee |
|---|---|---|
| SBI Business Loan | 11.20% | From 2% to 3% |
| HDFC Bank Business Loan | 15.65% | Starting from 0.99%, Max 2.50% |
| ICICI Bank Business Loan | 16.49% | Starting from 0.99%, Up to 2% |
| Citibank | 16.00% | Upto 2% |
| RBL Bank | 16.25% | 1.80-2.20% of loan amount |
| Tata Capital | 19.00% | From 1.50% to 2.50% |
| Lendingkart | 12.00% | 2% of loan amount |
| Bajaj Finserv | 18.00% | Upto 2% of loan amount |
| IDFC First Bank | 22.00% | 2.00% |
| IIFL | 16.00% | Up to 2% |
| Bank of Maharashtra | 14.50% | 1.00% of loan amount, Min Rs. 1,000 |
| IndusInd Bank | 14.00% | 2.50% |
| Kotak Bank | 16.00% | Upto 2% |
| Fullerton India | 17.00% | 2% |
| Indifi | 24.00% | 2 to 3% |
| Neogrowth | 19.50% | 2.5% of loan amount |
| IDBI Bank | 12.25% | 1.00% |
| Allahabad Bank | 11.15% | Rs. 229 - per lac, Min Rs. 2,038 Max Rs. 22,928 |
| Yes Bank | 16.25% | Up to 2% |
| PNB | 12.65% | 1.8% + taxes |
| OBC | 11.40% | 0.50% of Loan Amount |
| Indian Overseas Bank | 14.90% | Rs. 204 per lakh |
| Dhan Laxmi Bank | 12.90% | |
| DCB Bank | 10.70% | 2% |
| Andhra Bank | 15.75% | Case to Case |
| United Bank of India | 13.00% | 1.15% |
| Corporation Bank | 13.55% | 1.5%, Min Rs. 500 |
| Syndicate Bank | 12.65% | 0.5%, Min Rs. 500 |
| Bank of Baroda | 14.10% | Upto 1.00% |