What is a Business Loan?


Business Loans are unsecured loan which does not require any security or collateral .It also does not require any guarantor

Who can apply for a Business Loan?


Any individual who has got a source of income from business and profession can apply for a business loan.

When can one apply for a business loan?


You can apply for a business loan in order to fulfill any of your business needs which requires financial assistance. The loan can be used for buying a plot, expansion of business, wedding expenses, hospitalization expenses, holiday packages, buying jewellery, higher education etc.

Where can I get a business loan from?


business loans are offered by nationalized banks, private banks, foreign banks and a few Non Banking Finance Companies.

Is there any security or collateral for a business loan?


A business loan does not require any collateral or security. Exceptionally in some cases, a Co-applicant is required if certain norms are not met by the applicant.

What is the maximum one can get as a business loan?


business loans are available in the range of Rs. 50,000 to Rs.30 lacs depending on the income eligibility of an applicant. However banks also have specially designed products to offer higher loans.

What is the maximum tenor for a business loan?


The tenor of business loan ranges from 12 months to 60 months. However it should be noted that tenor is the discretion of the bank and also in most of the case, the tenor is restricted to 36 months.

Is there any fee for availing a business loan?


Yes, you have to pay processing charges as decided by the bank from time to time. Generally it varies from 2% to 2.5%.

How do I repay a business loan?


business loans are generally repaid by way of equated monthly installments (EMI)

Is there any moratorium period for repaying business loan?


No, moratorium is not applicable for business loans. Generally first EMI starts within 45 days of the disbursement of loan.

What is the rate of interest that will be charged on my business loan?


Rate of interest is a factor of prime lending rate (PLR) as announced by respective banks from time to time which varies with market conditions. Generally the rate varies from 13.5% to 22% depending on the loan amount and profile of applicant.

How much time does it take to get a business loan?


Generally it takes 3 to 7 working days to sanction a business loan after completion of all formalities in terms of compliance in documentation.

Can I get a rebate on the interest rate & processing fee?


Yes, a few banks offer special rates for those who have a relationship with their bank. The relationship could be a bank account, existing loan, a credit card etc.

What if I want to prepay my business loan?


Most banks allow its customers to prepay business loans after 6 months of disbursement. Generally banks charge a penalty of upto 5% as prepayment charges on the principal outstanding.

What if a few EMIs are not paid in time?


It is in the interest of the borrower to repay all the EMIs as per schedule. Delay in payment of EMIs or default would badly affect the credibility of the borrower. Moreover getting a loan at a later stage would be difficult. Generally banks share the credit history of a borrower with credit bureau and in turn they share data of credit history of a borrower with other banks.