Beginner's Guide to Business Loan Rates and Fees

Beginner's Guide to Business Loan Rates and Fees

There are a number of factors which potential borrowers have to think about when they apply for a business loan but the aspect that worries them the most is the business loan rates

Frankly speaking, the entire repayment plan of the loan is dependent on the amount of interest that one has to pay and some borrowers even prefer not to opt for a loan and choose to deplete their own resources instead when it comes to financing their business, just because they feel they would not be able to keep up with the monthly EMIs. However, an idea about the various charges associated with business loans will give a new businessman about the idea about the costs they might have to incur, and they might actually prove to cheaper in the long run, as well as quite beneficial for the business.

Most banks and NBFCs like Bajaj Finserv are now providing very good small business loan interest rates. Bajaj Finserv, for example, has an 18% onwards business loan lowest interest rate and it is one of the best in the market. For an existing business, which is already making a good profit and needs money to further upgrade the business, this is not a huge amount at all and can be easily paid back over time. There are no statement charges or secure fees either. A processing fee of 2% also has to be paid but if all goes well, then the loan is processed and approved in as less as 48 hours. Hence, anyone in urgent need of money for their business will be greatly benefitted.

Even for first time business loan borrowers, there are customized repayment options available for those who are investing in their business for the first time. Bajaj Finserv, for example, has Flexi loans and Flexi Interest- only loans that be customized and the borrower can choose their own repayment options. One can also make part- prepayments when they have surplus money at no extra cost and nor are there any charges on foreclosure as well. In case of Interest- only loans, one can keep on making the minimum interest payments for the entire loan tenure and the principal amount can be repaid at the end of the tenure. This is because it is quite understandable that small businesses might not make a huge profit at the very onset and the flexible repayment options take away much of the financial burden.

In case of conventional loans, there is an EMI bounce charge of Rs 2500 and a penal interest of 2% on the outstanding loan amount. It has been seen that many banks and NBFCs also have a number of hidden charges and the borrowers are quite surprised by them when their loan account is deducted. However, Bajaj Finserv has a very transparent loan system and the additional costs and charges for business loans have been kept at a minimum. Moreover, all the charges on loans under the Flexi Interest scheme are worked out on the limit that has been sanctioned. In case of Flexi Term Loans, all the charges are worked out on the present drop line limit. Foreclosures can be done only after the payment of the first EMI and before than the loan can only be cancelled. All other business loan and charges for conventional loans are also calculated after the payment of the first EMI.

There are also a number of pre- approved offers that can be availed by existing customers and their terms and conditions differ accordingly. Overall, all the charges and have been fixed to give the borrower the best facilities in terms of how the economy is performing and many businessmen have largely benefitted from it.

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