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When you avail of a business loan, you’re required to pay interest on the loan amount as per the business loan interest rate. This rate is usually expressed as an annual percentage and is charged on your outstanding business loan amount. Business loan interest rates in India vary from one lending institution to another.
At Tata Capital, we provide business loans at the most competitive interest rates. Our business loan interest rate for professionals starts from 12% per annum and for non-professionals it starts from 14% per annum. Moreover, depending on your loan eligibility, income, business turnover, credit score, and other parameters, we can determine the best business loan interest rate for you.
Additionally, when you apply for a Tata Capital business loan, you do not have to worry about any hidden charges. Be it our business loan processing fees, foreclosure charges, or EMI bounce charges, we transparently convey all our charges and rates for a business loan at the time of loan processing.
The interest that you need to pay on your business loan depends upon several factors, including your business loan amount, loan tenure, and the business loan interest rate charged by your lender. This rate is expressed as an annual percentage and is charged on the outstanding principal amount of your business loan.
To calculate the interest on your business loan, lenders multiply your outstanding principal amount at the end of each day with the applicable business loan interest rate. If this calculation seems complex to you, you can simply use a business loan EMI calculator to determine the interest amount and the EMI that you need to pay for your business loan.
You can also use the following formula to evaluate your business loan EMI:
EMI = [P x r x (1+r) ^n]/[(1+r) ^n-1]
Here,
‘P’ is the Principal Loan Amount
‘r’ is the rate of interest
‘n’ is the loan tenure in months.
The business loan interest rates in India for self-employed individuals may vary from one lending institution to another. The interest rates for business loans may also depend on the nature of the business and the qualifications of the borrower.
The table below depicts our business loan interest rates for self-employed individuals:
| Customer Profile | Rate of Interest |
|---|---|
| SEP other than doctors | 12% -17.5% |
| Self Employed Doctors | 12-19% |
| Self Employed Non professional | 14%-26% |
At Tata Capital, we provide business loans for self-employed professionals - such as doctors, lawyers, chartered accountants, etc. - at lower interest rates as compared to self-employed non-professionals. Our business loan charges may also differ based on the customer’s profile.
Lenders primarily offer two types of business loan interest rates in India - fixed business loan interest rate and floating business loan interest rate.
In the case of a fixed business loan interest rate, the rate of interest remains fixed throughout the loan tenure. Hence, the EMIs that you need to pay also remain the same. If you’ve opted for a business loan at a fixed rate of interest, you will know your EMIs in advance.
But in the case of a floating business loan interest rate, the applicable rate of interest keeps on changing according to the Repo-Linked Lending Rate (RLLR) decided by the Reserve Bank of India (RBI). If you’ve opted for a business loan with a floating rate of interest, your EMIs may change during your loan tenure.
Business loan rates in India are decided based on numerous factors, some of which can be controlled by the applicant. Here are a few tips for you to get the lowest business loan interest rate:
Lending institutions determine business loan interest rates after looking at several factors, such as:
When you apply for a business loan with a lender, it incurs several expenses while processing your loan application. To cover these expenses, lenders charge a business loan processing fee. This fee is charged as a fixed percentage of the sanctioned loan amount.
The processing fees for business loans usually comprise the expenses incurred by the lender to review the borrower’s credit score, check their business loan eligibility, verification of documents, and other administrative charges. This fee is charged as a one-time cost and is non-refundable.
At Tata Capital, we charge a very nominal business loan processing fee of upto 3% of the loan amount
For default in payment of interest and/ or principal amounts – 3% per month on defaulted amount (Annualized Penal Charge of 36%)
These are those charges that are levied in case of an EMI bounce per instance. In other words, these charges are levied when you miss a personal loan EMI payment due to inadequate funds in your bank account. At Tata Capital, you’ll be required to pay Rs. 600 for every Cheque/Payment Instrument Dishonour.
Charges will be levied if EMI is due but valid instrument is not available for banking due to Mandate rejected by Borrower’s bank or EMI Post-dated cheques(wherever applicable) are not available. Tata Capital charges a nominal amount of Rs. 450
Apart from the interest rate and processing fee, lenders can levy several types of business loan charges to cover unforeseen expenses during the loan tenure. These charges may include document processing fees, collection fees, and foreclosure charges, among others.
First Year: 1% or 1000 whichever is higher per year will be deducted from the Facility and shall be payable at the end of the 13th month
Second Year: 0.75% or 1000 whichever is higher per year will be deducted from the Facility and shall be payable at the end of the 13th month
Subsequent years: 0.5% or 1000 whichever is higher per year will be deducted from the Facility and shall be payable at the end of the 13th month
₹ 1999
Soft Copy - Nil
Branch walk-in - ₹ 250
Foreclosure charges on Term Loan Facility:
4.5% on the principal outstanding at the time of foreclosure
Part-Prepayment/ Prepayment/ Foreclosure charges on Top-up:
Part-Prepayment/ Prepayment/ Foreclosure Charges in Hybrid Term Loan:
4.5% on the dropped down amount at the time of foreclosure
2% of the loan amount or ₹ 5750, whichever is higher
₹ 550
Soft copy - Nil
Branch walk-in - ₹ 550
₹ 550
Soft copy – Nil
Branch walk-in - ₹ 199
As applicable
Charges Rs 850
At Actuals
At Actuals
At Actuals
At Actuals
At Actuals
At Actuals
Broken Period Interest amount and 1st EMI date depend on the date of disbursal and the final figures would be mentioned in the Welcome Letter
Note:
With a Tata Capital business loan, you can get adequate business finance at competitive interest rates. You can use our business loan to meet your working capital requirements, expand your business, upgrade business equipment, and tap into new opportunities. Our business loans are flexible to complement your various business-related financial requirements.
Besides attractive business loan interest rates starting from 12% per annum, we offer fixed and structured EMI plans to make your repayment experience convenient. You can avail of financing as per your precise business requirements and enjoy extended loan tenures of up to 60 months.
Moreover, we won’t ask you to put your business assets on the line to secure funds for your business. With us, you can forget about standing in long queues and lengthy paperwork. We allow you to apply for an online business loan from the convenience of your home or office and get faster approval.
With Tata Capital, you can enjoy highly competitive interest rates on business loans. Among several other factors, our interest rate on business loan depends on the nature of the business and the qualifications of the borrower. For self-employed non-professionals, Tata Capital’s business loan interest rates range between 14% and 26%, whereas for self-employed professionals and doctors, it ranges between 12% and 17.5%.
Furthermore, you have the flexibility to choose between fixed and floating interest rate on business loan. If you opt for the fixed rate, your interest rate on business loan will remain the same throughout your loan tenure. However, if you opt for the floating or variable rate, your interest rate on business loan may change during its tenure, depending on certain external factors. As a result, your EMIs may also change.
Numerous factors can affect business loan interest rates. These include:
Borrower's credit score
Nature of the business
Qualifications of the business owner
Experience of the borrower in running a business
Annual turnover
Revenues and profits during the last three financial years
Relationship of the borrower with the lender
Collateral or security presented by the borrower
Future growth prospects of the business
External factors, such as the monetary policy of the Reserve Bank of India
Yes. With Tata Capital, you can get the best deal on a business loan interest rate based on your credit score, annual turnover, repayment history, business vintage, and several other factors. You can even negotiate with our customer care executive to get the lowest interest rate. To negotiate your interest rate on business loan, visit your nearest Tata Capital branch with the approval letter or dial our customer care helpline - 1860 267 6060. You can also send an e-mail to contactcommercialfinance@tatacapital.com.
Usually, lenders levy certain charges or fees on business loans to cover the administrative costs and additional expenses incurred by them during loan processing and verification. Some of the general business loan charges include:
Bounce charges or dishonor charges
Mandate rejection service charges
CCOD Annual maintenance charges
Document processing charges
Foreclosure charges
Statement of Account charges
Loan cancellation charges
Payment instrument swapping charges
Payment collection charges
Duplicate repayment schedule charge
Duplicate NOC charge
Post-dated cheque charges
Stamp duty charges
Apart from the ones mentioned above, some other charges may also be levied on your business loan. Get in touch with our customer care executive to know the complete details of your business loan charges.
Your credit score is one of the primary factors that determine your interest rate for business loan. When you apply for a business loan, the lender pulls out your credit score from a credit rating agency to check your creditworthiness. The higher your credit score is, the lower will be your interest rate on business loan. If you have a credit score of 750 or more, you can get the lowest business loan interest rate, given that you fulfill other eligibility requirements.
A high credit score denotes that you are a responsible borrower who knows how to handle debts. That is why you must always maintain a credit score of 750 or more. Any score below this is considered unsatisfactory by lenders.
The repayment tenure is the time taken by you to repay your business loan to the lender. At Tata Capital, you have the flexibility to choose your business loan tenure as per your repayment capability. Our business loan tenure ranges between 12 to 60 months. If you want to spread your repayments in smaller EMIs, you can opt for a higher repayment tenure. Or else, if you want to repay your business loan faster and save on your interest outgo, you can opt for a lower repayment tenure. Make sure to choose your business loan tenure wisely.
At Tata Capital, you have the flexibility to choose your business loan tenure as per your repayment capability. If you want to repay your loan in smaller EMIs, you can choose a higher repayment tenure of up to 60 months. However, if you fail to repay your business loan within the stipulated time, you will have a grace period to complete your repayment and avoid being a defaulter. For more information on the grace period for business loan repayments, contact our customer support team.
At Tata Capital, we provide business loans to entrepreneurs across industry verticals. It means that you can avail of a business loan from us irrespective of the industry in which you are operating. All you have to do is fulfill our simple business loan eligibility criteria.
Our business loans are available for Self-employed Individuals, Proprietorship Firms, Partnership Firms, Limited Liability Partnership (LLP) Firms, Private Limited Companies, Closely Held Public Limited Companies, Hindu Undivided Families (HUFs), Trusts, and Societies.
We also provide customized and tailor-made business loans for women entrepreneurs, start-up business owners, and micro, small, and medium-sized enterprises (MSMEs).
Yes. With Tata Capital, you can avail of a business loan of up to Rs. 90 lakhs and meet all financial requirements of your business. You can also transfer your business loan from another lender to us and enjoy some exciting features and benefits, such as highly competitive interest rates, flexible loan tenure, business Hybrid Term Loan or Hybrid Term Loan, minimal documentation, quick approval, top-up loan facility, and doorstep services. To avail of our business loan balance transfer facility, you can get in touch with our customer care executives, and they will guide you through the entire process.
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