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Business Loan Interest Rates And Charges

What is the Interest Rate on a Business Loan?

Our business loan interest rates start at 19% are competitive amongst the other players in the industry. However, depending on loan eligibility, income, your business and other criteria, we determine the best interest rates for your business loan requirement.

When you apply for a Business Loan with Tata Capital, you do not have to worry about any hidden charges. Whether it is related to processing fees, foreclosure charges, or delayed EMI Payments, all information is transparently-provided for smooth processing of your Business.

Business loan interest rates are the proportion of the loan amount a financial institution charges as interest to the borrower. The rate is usually expressed as an annual percentage. For business loans, the interest rate is applicable on the principal amount.

Here are the Tata Capital business loan rates in 2021

Business Loan 19%

How to Calculate Interest on Business Loans?

 The loan you avail of comes at a cost, which is essentially the business loan rate amount charged by the lender on the principal sum for a fixed tenure. Here, the interest rate is expressed in a percentage of the principal.

The nominal business loan interest is calculated by multiplying the outstanding loan amount per day by the loan’s interest rate that is assigned by the lender, considering various factors that impact the rate.

However, this business loan rate doesn’t cover the penalty, pre-closure fee, processing fee, and other applicable charges that your lender may levy on the loan separately.

You can also use the following formula to calculate your EMI liability for your Business loan-

EMI = [P x r x (1+r)^n]/[(1+r)^n-1]

Here, P is Principal, r is the rate of interest, and n is the number of instalments or loan tenure in months.

What are the Business Loan Interest Rates for Self Employed?

Self Employed Non-Professional 16.50% Onwards 2.00% Onwards
Self Employed Doctor & Professional 13.50% Onwards 1.50% Onwards

*Final ROI and Processing Fees may vary based on assessment program and Loan amount 

What are the Types of Business Loan interest rates?

There are two types of business loan interest rates:

 

1.  Fixed business loan rates: The interest rates remain constant throughout the tenure and you will always have to pay a fixed EMI. So, once you avail of a business loan at a fixed rate, you can evaluate your EMI value in advance

2. Floating interest rates: Here, the rate's value changes according to the Repo-linked Lending Rate (RLLR) decided by the Reserve Bank of India (RBI). If you opt for a loan with a floating interest rate, your overall EMI burden and tenure can change.

 

 

What Are the Factors Affecting Business loan Interest Rates?

  • CIBIL Score

CIBIL score is a critical factor in getting loans at a competitive rate of business loan rates. A healthy CIBIL score depicts strong repayment capability and creditworthiness, and the lender considers you as a low-risk borrower.

  • Company Tenure

Whether you are a small or a mid-sized organisation, you must have an excellent track record of being in business and handling credit and timely repaying it for years. With such business experience, you will easily qualify for lucrative MSME loan interest rates to further expand your venture.

  • Annual Turnover

Your annual business turnover significantly affects your rate of business loan interest. The higher your business turnover is, the lower the business loan interest rates will be, therefore lowering your EMI amount.

  • Revenue and Profit

Before deciding your rate of business loan interest, the lender always checks your business’s monthly, quarterly and annual revenue. Decent or profitable trends and healthy business financials assure lenders that you are less likely to default on your EMIs, which means you get charged lower business loan rates.

  • Business Vintage

This term indicated the age of your business. If your business has been up and running for many years, you will have a high business vintage and can enjoy lower rates of interest.

  • Collateral

If you provide strong security or collateral, then the lender's risk is reduced and you will get lower interest rates.

What are Business Loan Processing Fees?

The processing fee is the amount charged on your business loan application as a one-time charge for the entire loan process. The processing fees usually comprise the charges required to review your CIBIL score, check for business loan approval, and other administrative costs. It is an upfront cost that you pay for the paperwork involved in the process. This fee is non-refundable and it is a one-time cost.

What are Business Loans Charges?

Business Loan charges include costs for cheque bounce, mandate rejection service, CCOD annual maintenance, document processing, outstation collection, foreclosure, and more.

Tata Capital Business Loan Processing Fees

Penal interest/Additional Interest

3% on Overdue Amount per month + GST

Miscellaneous Charges

Bounce Charges

₹ 2000 for every Cheque/ Payment Instrument Dishonour + GST

Mandate Rejection Service Charge

₹ 450 + GST

Charges will be applicable on your Business Loan EMI Due date in case the account does not have an Active mandate after the exhaustion of the given post-dated cheques. This charge would be applied every month until there is an Active Mandate linked to the account

CCOD Annual Maintenance Charges

First Year: 0.75% or 1000 whichever is higher per year will be deducted from the limit and shall be payable at the end of the 13th month

Subsequent Years: 0.50% or 1000 whichever is higher
per year will be deducted from the limit and shall be payable at the end of the 13th month

Document Processing Charges

₹ 1,999 + GST

Outstation Collection Charges

₹ 100 + GST per repayment instrument

Statement of Accounts

Soft Copy – Nil

Branch walk in - ₹ 250 + GST

Foreclosure Charges

4.5% on the future principal outstanding on existing loan+ Applicable taxes

No Foreclosure is allowed in first 9 months. 6.5% charges if foreclosed within 9 months

Foreclosure Charges for Top Up

2.25% on the future principal outstanding on existing loan + GST

Foreclosure charges shall be levied only if new rate is lower than existing rate

Foreclosure Charges in CCOD Cases

4.5% on the Dropped down limit amount + Applicable taxes

No Foreclosure is allowed in first 9 months. 6.5% charges if foreclosed within 9 months

Loan Cancellation Charges

2% of loan amount or ₹ 5750 whichever is higher + GST

Instrument Swap Charges

₹ 550 + GST

Duplicate Repayment Schedule

Soft copy - Nil

Branch walk in - ₹ 550 + GST

Duplicate NOC

₹ 550 + GST

Foreclosure Letter Charge

Soft copy – Nil

Branch walk in - ₹ 199 + GST

Post Dated Cheque Charges

₹ 850 + GST

Why Choose Tata Capital Business Loans?

 At Tata Capital, our multi-purpose financing solutions available at competitive rates of business loan interest ensure that no opportunity is out of bounds for your business. Avail of flexible loans tailored to complement your business requirements. We don’t ask you to put your business assets on the line to secure funds and offer collateral-free business financing.

Besides attractive MSME loan interest rates starting at just 19%, we offer structured EMI plans to make your repayment experience convenient. Enjoy extended loan tenures between 12 and 36 months and decide your monthly instalment considering your business cash flow.

With us, you can forget out hassles of standing in long queues and carrying hefty paperwork because we only ask for basic documents and extend seamless loan processing.

Disclaimer

  • The fees/charges indicated above are subject to revision at Tata Capital’s discretion from time to time.
  • Customers who have taken a loan before 15th April 2019 need to refer to the loan agreement and schedule of charges for applicable rates.
  • For the definitions of the above charges, please refer to the Master Terms & Conditions sheet.
  • Soft copies of documents mentioned in the table above will be provided free of cost. For hard copies, please refer to the above table for the applicable fees & charges.

Business Loan FAQs

Your EMI depends on the loan amount. Please use our Business Loan EMI Calculator to know exactly how much you need to pay.

You can take up to ₹ 75 lakhs and more depending on your credit score.

You can take up to 36 months to repay your business loan.

The interest rate for Business Loan is fixed.

Step Up Flexi EMI Plan

This repayment option allows you to pay lower EMIs in the beginning and as your income grows you pay higher EMIs.

1. Provides higher Business Loan eligibility
2. Pay more when you can afford
3. Helps to manage income flow efficiently.

Find the right loan for you