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Features Of Business Loan In India

By Author: Aishwarya Mahurkar
Total Articles: 291

Business loan is an ideal way to ensure one’s venture has a favourable start, or successful progress. As an owner, one would need to take the ideal decisions to ensure that business runs smoothly and successfully, which would also include the financial decisions. When opting for this finance, one would need to consider all the factorial requirements, pros and cons and the return on investment in each option. But in order to know what the business loan in India has to offer the owner, one would need to consider its features:


Interest rate:


For every loan, the interest rate is one of the most crucial features of the loan. As a business owner, while opting for the loan one would need to consider the interest rates before the additional features of this financial aid. No doubt with plenty of financial assistance options available, one would have plenty of choice. But when considering the options of the personal loan, loan against property and the business loan in India, the ideal option is the business loan. Depending on the amount of the loan and the tenure of the loan, a business loan will come with an interest rate of 3% to 10%. In comparison to the personal loan, the interest rate one would enjoy would be anywhere between 16% to 18% rate of interest. Alternatively, the loan against property will offer you an interest rate between 11% to 14% p.a.


Cash outflow

Another aspect of the business loan in India one must know is the cash flow. Most financial institutes will offer a minimum cash outflow for this type of loan. This is due to the fact that this loan requires only the interest to be paid regularly only on the principal amount that has been used. Ideally, if a business is based on a termed duration, this loan is applicable, so as long as the payment deferment clauses are attached to it. This is applicable to both new projects or expansion of existing projects


Initial low processing fees

Every loan has a processing fee. This processing fee can range from 2 % to 4 % depending on the type of loan one would opt for. A personal loan would charge a minimum of 2% whereas the loan against property will charge between 1% to 2 % with additional fees for legal opinion. However, with the business loan, you will have low processing fees, excluding the fee for legal opinions and encumbrance certificate.

Collateral requirement:

One would need to submit collateral depending on the requirement of the loan type. Unsecured loan like the personal loan need not require the submission of collateral. However, these compensate the factor with a high interest rate. Alternatively, loans like loan against property and gold loan, one would need to submit collateral, as mentioned with a returning loan amount value ranging from 65 to 80% of the collateral.

Author Bio :

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the SME loan in India facility. She writes about a variety of topics covering the home loan documents, rates & business loan in India that help to make the best decision.

Total Views: 71Word Count: 530See All articles From Author

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