Business Loan Interest Rates

Apply for instant business loans at attractive business loan interest rates starting from just 6.90% p.a. The processing fee is charged up to 3.5% per annum and the repayment tenure can go up to 25 years depending on the type of lender and business loan chosen.

Current Business Loan Interest Rates 2021

Business Loan Interest Rate and Fees, Apr 2021
Interest RateStarting @ 6.90% p.a.
Processing FeeUp to 3.5%
Loan TenureUp to 25 years
Lowest EMI Per LakhRs. 1,975 for 5 years
Prepayment ChargesUp to 4%
  • Compare current business loan interest rates online starting from 11.90% p.a.
  • Choose the best business loan provider from our 100+ banking partners, including HDFC Bank, ICICI Bank, IDFC FIRST Bank, and so on, for instant and hassle free business loans.
  • Apply for a business loan online with your preferred lender and get an instant decision on your loan application.

Compare Best Business Loan Interest Rates of All Banks 2021

Below is the comparison between various business loan offers from top banks in India, according to current business loan interest rates and processing fees. This table will assist you with deciding the best and most affordable business loan available in the market right now.

BanksInterest RatesProcessing Fees 
HDFC Bank11.90% - 21.35%Up to 2.50% + GST
ICICI BankUp to 11.10% Up to 2% + taxes 
IDFC First Bank14.5% onwardsUp to 3.5% 
SBI7.25% onwardsUp to 1% 
Kotak Mahindra Bank17% onwardsUp to 2% + taxes 
Bajaj Finserv17% onwardsUp to 2% + taxes
HSBC Bank7.5% onwardsNil 
Axis Bank9% - 18.50% Up to 2% + taxes
PNB Bank6.90% onwardsUp to 0.50% 
Federal Bank9.20% - 16%  Up to 1%
IndusInd Bank13% - 22% Up to 3% + taxes
Central Bank of India 7.10% - 13.35% Depends on scheme 
Indian Bank 8.10% - 14.55% Up to 1.15% 
UCO Bank8.85% - 11.85% Depends on scheme  
Bank of India9.70% - 15.45% Depends on scheme
South Indian Bank7.25% - 16.75% Up to 2% 

Lowest Interest Rate on Business Loan

Compare current business loan interest rates on MyMoneyMantra.com to get affordable business loan EMI by getting the lowest interest rates. Current business loan interest rates start from as low as 6.90% p.a. A business loan is a financing option that can be used to start a new business or to expand an existing one. These loans are provided at the most competitive rates of interest to help businesses fund any expenses that are related to purchasing new equipment, purchase of inventory, overheads, expansion of the current premises, and so on. There are different types of business loans that one can avail to meet the exact requirement of the business. However, getting a business loan isn’t easy as it involves a complicated process. Our business loan experts can help you with the entire process, from application to disbursal. We are partnered with more than 100 banks, NBFCs, and other financial institutions. We have all the best business loan offers at attractive interest rates that suit all your business requirements.

Features of Business Loans

Business loans are loaded with beneficial features as mentioned below:

  • You can get loans without any security: Collateral free loans can be availed for any investment in your business depending upon the credit score and the eligibility criteria. You also have the option of credit guarantee schemes that provide a cover for the loan that is availed. For businesses that qualify for this scheme, you have the advantage of availing loans without any guarantee or collateral against the loan. All you have to do is pay the annual fee recommended as per the terms of the credit guarantee scheme.
  • Repayment terms are flexible: Business loans ensure low interest rates that make repayments easier. The interest rate on these loans is flexible as per the credit score of the applicant. You also have a moratorium period or a holiday period in case of new businesses where no equated monthly instalment (EMI) is payable for the set period. Borrowers have the advantage of choosing a repayment tenure as per the repayment capacity and the EMI that is payable each month.
  • Disbursal of loans is hassle-free: Business loans have a quick turnaround time once the documentation process is completed as required by the bank. Usually, these loans are disbursed within 5 to 7 days of approval, making it easier for individuals to get access to funds when required. Once approved, the loan is disbursed into the bank account of the individual.
  • Loan application process is simple: You have the option of applying for these loans online and offline. All you have to do is fill up an application form and provide the necessary documents. The documentation process is also fairly simple and straightforward with Business Loans. When you apply for a business loan, you can get a detailed checklist of the documents that you require. This further simplifies the process and allows you to get loans faster.

Types of Business Loans

The most common types of Business Loans available are as follows:

  • Term Loan: These loans are provided over a fixed repayment tenure that can go up to 25 years depending upon the quantum of finance. The advantage with a term loan is that you are able to get a large loan quantum at the lowest interest rates. With most banks, collateral is required in order to avail a term loan depending upon the scheme that you choose.
  • Working Capital: This is a short-term loan which is usually payable in a period of one year. In some cases, the working capital may be provided without any security or collateral depending upon the repayments made by the individual towards an existing loan or credit facility. You can also avail working capital against securities like FDs, LIC policies, etc. Working capital is one of the best options available for you to get immediate access to funds to meet any overheads such as salary payments, purchase of goods, etc.
  • Line of Credit: A line of credit is provided against the current account of the business. This is a credit limit that functions like a credit card. Based on the security provided, you are given a limit that you can use for any expenses related to the business. You can use as much as you need just like a credit card and the interest is chargeable only on the amount that you have used. Once repayments are made, the entire credit amount is available for use again.
  • Equipment Finance: This is a type of loan that is exclusively provided for businesses to purchase equipment that is required for operations. In case of this loan, the quantum of finance depends upon the funds required to purchase the equipment. The primary security, in this case, is the hypothecation of the equipment that is purchased using the loan. Depending upon the type of business and the credit score of the applicant, the bank may also require additional collateral in order to provide this loan.
  • Government Aided Schemes: There are several schemes introduced by the government to help businesses, particularly in the small, medium, and micro sectors. These loans are available with all the banks across the country. The advantage with these loans is that the rates of interest charged on these loans are extremely low, making repayments affordable. In addition to this, you also have the option of a credit guarantee scheme. This acts as an insurance cover for the loan availed and the individual is required to only make payments towards an annual fee. The advantage of this credit guarantee scheme is that you do not have to provide any collateral or guarantee in order to avail the loan.

Business Loan Eligibility

The common eligibility criteria for Business Loans are as follows:

  • The individual should be a minimum of 18 - 25 years of age.
  • The individual should not be older than 65 years of age at the time of loan application.
  • The minimum turnover of the business should be as per the requirements of the bank.
  • The individual should have at least 2 years of experience in the industry that they are running the business in.
  • The applicant should be a resident of India.

The eligibility conditions for the loan vary with each bank, non-banking financial company (NBFC), or financial institution. It has an impact on the interest rate charged and the loan amount that is provided as well.  The higher the eligibility of the individual, the better are the loan agreement terms.

How to Apply for a Business Loan on MyMoneyMantra?

Applying for a Business Loan with MyMoneyMantra is extremely simple. All you have to do is follow these steps:

  • Log on to the official MyMoneyMantra website.
  • Select the loan that you wish to apply for.
  • You will be directed to a loan application form that requires you to provide details like your name, purpose of the loan, income, etc.
  • Select the preferred partner for Business Loan.
  • Based on this a loan quote will be provided and you can complete the application.
  • A representative from MyMoneyMantra will contact you for the documentation process.
  • The documents are collected and verified at your doorstep.
  • The complete application is submitted to the chosen bank or financial institution.
  • MyMoneyMantra will follow up on the loan application process to ensure quick disbursement.

Business Loan EMI Calculation

Before you apply for a loan, calculating the EMI is extremely important. This helps you check the affordability of a loan. You can either calculate the EMI manually or using the MyMoneyMantra EMI Calculator. Using an EMI Calculator is the simpler option to calculate the EMI as it is quick and free from any errors. EMI Calculators are financial tools that you can get on most bank websites. These tools are completely free of cost. In order to calculate the EMI, provide the loan amount, the rate of interest, and the tenure of the loan. The exact EMI will be calculated and displayed on the screen instantly. EMI calculators use the formula mentioned above in order to calculate the EMI.

Business Loan Offers

Get Kotak Mahindra Bank Business Loan up to Rs. 2 Crore online at interest rate starting from 16% p.a.

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Business Loan Interest Rates FAQs

Can I get a business loan for a startup?

Yes. There are special schemes that provide easy funding options to startups as well. Any company that is under 5 years old and has a turnover under Rs. 25 Crores can avail these startup loan schemes.

What factors affect interest rates on business loans?

Business loan interest rates are usually negotiable based on several factors. A high credit score, the income generated by the business, and the collateral that you provide for a business loan can help you reduce the interest rates considerably.

Who can avail a business loan?

Business loans are provided to sole proprietorship firms, partnership firms, limited liability partnerships, and corporates. These loans are reserved for any investment in the business, including making repayments towards overheads, expanding the business or purchasing equipment or goods for the business.

What collateral can be provided for a business loan?

Any movable asset that has good value as per the loan amount that is sanctioned can be provided as security for the loan. This includes property, financial assets like Fixed Deposits and even LIC policies. With most banks, the hypothecation of assets that are purchased using the loan serve as primary security.

Can I foreclose a business loan?

In some banks, it is possible to foreclose your business loan. However, it is recommended that you check the foreclosure fees for the loan before you do so. In case this amount is higher than the interest paid towards the loan, it is best avoided. You must also remember that foreclosing loans can affect your credit score negatively. You will also lose access to a large amount of funds when you foreclose any loan.

Can part payments be made on business loans?

Yes, part payments are allowed by most banks on business loans. These part payments can be made after you have paid a few EMIs as per the terms of the bank. Some may also have restrictions on the number of part payments that you make on the loan each year.

How will a business loan affect my credit score?

Each time you apply for a loan, the credit score does reduce. However, when you make regular repayments towards any credit facilities availed, you can restore your credit score. Make sure that you do not miss on any EMI and make the payment on or before the due date to build a strong credit score.