Check Business Loan Interest Rate Online – Loan Bazaar
Easily compare and check the latest business loan interest rates online at Loan Bazaar. Our platform provides up-to-date information on the most competitive rates available in the market, helping you make an informed decision. Fuel your business growth with flexible loan options and get the capital you need at lowest rates.
* Onwards
| Lender | Interest Rate (ROI) | |
|---|---|---|
| Lender | ROI | |
| HDB Financial Services Ltd. | 8.00% Onwards * | Claim Claim |
| State Bank of India (SBI) | 8.50% Onwards * | Claim Claim |
| UGRO Capital | 9.00% Onwards * | Claim Claim |
| Bajaj | 9.75% Onwards * | Claim Claim |
| Bajaj Finserv | 9.75% Onwards * | Claim Claim |
| Bank of Baroda | 9.99% Onwards * | Claim Claim |
| SBI CAPS | 10.25% Onwards * | Claim Claim |
| HDB Financial Services Ltd. | 10.50% Onwards * | Claim Claim |
| IDBI BANK | 10.50% Onwards * | Claim Claim |
| HDFC | 10.75% Onwards * | Claim Claim |
| HSBC Bank | 10.75% Onwards * | Claim Claim |
| Aditya Birla Finance | 10.99% Onwards * | Claim Claim |
| IDFC First Bank | 10.99% Onwards * | Claim Claim |
| Reliance Capital | 11.00% Onwards * | Claim Claim |
| Union Bank of India | 11.00% Onwards * | Claim Claim |
| IIFL Finance | 11.00% Onwards * | Claim Claim |
| Punjab National Bank | 11.00% Onwards * | Claim Claim |
| Axis | 11.25% Onwards * | Claim Claim |
| South Indian Bank | 11.50% Onwards * | Claim Claim |
| Clix Capital | 11.99% Onwards * | Claim Claim |
| Central Bank of India | 12.00% Onwards * | Claim Claim |
| Flexi loans | 12.00% Onwards * | Claim Claim |
| Fullerton India Credit | 12.00% Onwards * | Claim Claim |
| Lendingkart | 12.00% Onwards * | Claim Claim |
| Shriram City Union Finance | 12.00% Onwards * | Claim Claim |
| Tata Capital | 12.00% Onwards * | Claim Claim |
| ICICI Bank | 12.25% Onwards * | Claim Claim |
| Karur Vysya Bank | 12.50% Onwards * | Claim Claim |
| Mahindra Finance | 12.99% Onwards * | Claim Claim |
| Dhanlaxmi Bank | 13.00% Onwards * | Claim Claim |
| Manappuram Finance | 13.00% Onwards * | Claim Claim |
| Muthoot Finance | 13.00% Onwards * | Claim Claim |
| RBL Bank | 13.00% Onwards * | Claim Claim |
| Bandhan Bank | 13.50% Onwards * | Claim Claim |
| NeoGrowth Finance | 15.00% Onwards * | Claim Claim |
| L&T Finance | 15.50% Onwards * | Claim Claim |
| Indusind bank | 15.99% Onwards * | Claim Claim |
| YES Bank | 15.99% Onwards * | Claim Claim |
| Kotak Mahindra Bank | 16.00% Onwards * | Claim Claim |
| Standard Chartered | 17.25% Onwards * | Claim Claim |
| Indifi | 18.00% Onwards * | Claim Claim |
| M Capital | 24.00% Onwards * | Claim Claim |
Get the Best Business Loan Rates – Fast, Simple & Reliable
A business loan offers financing to entrepreneurs, businesses, or startups to fund operational expenses, capital expenditures, or expansion plans. One of the most important factors when considering a business loan is the business loan interest rate, as it directly influences the total cost of the loan and your monthly repayments. Business loan interest rates in India generally range from 10% to 24%, depending on various factors such as the type of loan, the financial health of the business, the loan amount, and the repayment tenure.
Key Factors Affecting & Influencing Business Loan Interest Rates
1. Credit Profile of the Business: The business’s creditworthiness is among the most important factors influencing the business loan rate. Lenders typically assess the business’s credit score, financial health, and credit history to gauge the risk associated with lending. A high Credit score (750 or above) usually results in a lower interest rate, indicating the business has a good repayment history. On the other hand, a lower credit score or a history of missed payments may lead to higher rates.
2. Loan Amount & Tenure: Your loan amount can impact the business loan interest rate. Smaller loan amounts might attract higher rates because the lender’s risk is spread over a lower amount, while larger loans may come with slightly lower rates due to the lender’s ability to generate more revenue from a higher loan value. Large businesses with higher financing needs may be offered more competitive rates than small businesses. Longer tenures may attract higher rates, though some lenders offer better terms for long-term loans.
3. Nature of Business and Industry: Lenders often categorize the business sector. The industry or sector in which the business operates also influences the business loan rates. Businesses in riskier sectors might face higher interest rates than those in more stable sectors.
- Due to their volatility, high-risk industries like real estate, startups, and certain types of retail may attract higher interest rates.
- Low-risk industries such as healthcare, FMCG (Fast Moving Consumer Goods), or tech startups in stable markets are often offered low rate business loans because they are perceived as safer investments.
4. Type of Loan (Secured vs. Unsecured):
The type of loan, whether secured or unsecured, plays a major role in determining the business loan interest rate.
- Secured Business Loans: If the business can pledge collateral (e.g., property, machinery, inventory), the lender’s risk is reduced, leading to low rate business loans.
- Unsecured Business Loans: If no collateral is provided, the lender faces a higher risk and may charge higher interest rates to compensate for that increased risk.
Business loan ROI insights:
1. Personal & Business Guarantees:
When a business has few significant assets, lenders might ask the owner to provide a personal guarantee. This guarantees the loan repayment with the owner’s personal assets, which can reduce risk for lenders and result in lower interest rates. If the business is a startup or lacks sufficient credit history, adding a co-signer or third-party guarantor may help secure a loan with better rates. If the business is a startup or lacks sufficient credit history, adding a co-signer or third-party guarantor may help secure a loan with better rates.
2. Economic Conditions & Central Bank Policies:
The monetary policies of the Central Bank of India largely influence interest rates in the economy. When central banks raise or lower the benchmark interest rate (the rate at which they lend to commercial banks), it directly affects the rates lenders charge on business loan applications. Central banks might increase interest rates to slow down the economy if inflation is high. In contrast, if inflation is low and the economy is sluggish, central banks may reduce rates to encourage borrowing and spending. Business loans tend to be more expensive during periods of high inflation due to the risk of eroding value over time.
3. Business Age and Stability:
Lenders typically offer better interest rates to established businesses that show consistent growth or profitability. New businesses or startups, especially those with limited financial history, are considered higher risk and may face higher rates. Older businesses with a proven track record and financial stability are seen as more reliable borrowers.
4. Loan Purpose:
The business loan interest rate can also be influenced by the loan’s intended purpose. Loans used for expansion or capital expenditure might carry different rates than loans used for working capital needs or short-term liquidity. Lenders might offer lower rates for loans aimed at growth-oriented projects because they view the investment as more likely to generate returns.
5. Repayment History and Cash Flow:
A business’s cash flow and repayment history are critical factors. Lenders are more likely to offer favorable rates if the business has strong, predictable cash flow and a track record of paying off debt on time. Conversely, businesses with irregular cash flow or a history of late payments may face higher business loan rates or even be denied a loan.
FAQs
A business loan interest rate is the percentage charged by a lender on the amount borrowed by a business. This rate is applied to the principal loan amount and determines the total interest to be paid over the loan tenure. The interest rate directly impacts the monthly EMI and the overall cost of borrowing.
Various elements can affect the interest rate associated with a business loan.:
- Credit score and financial health of the business.
- The loan amount and loan tenure.
- Whether the loan is secured or unsecured.
- The type of business and the risk level of the industry.
- Economic conditions and changes in the Repo Rate or MCLR.
To obtain the best possible interest rate on a business loan:
- Maintain a good credit score (above 750).
- Have a strong financial history with consistent revenue and profit.
- Consider providing collateral, if feasible, to ensure the loan.
- Evaluate loan options from different banks and financial institutions.
- Opt for a shorter loan tenure, which may come with a lower interest rate.
Many lenders are open to negotiations, especially if you have a strong business profile, high revenue, and a good credit score. If you are seeking a large loan or have a long-standing relationship with the lender, you may be able to negotiate a lower rate.
The interest rates on unsecured business loans are greater than those on secured loans. Unsecured loans carry more risk for the lender as they are not backed by collateral.
A higher credit score (typically above 750) shows your business is financially stable and has a good history of repaying debts. Therefore, lenders may be inclined to provide you with a reduced interest rate. A lower credit score, on the other hand, may result in higher rates or difficulty securing a loan.
Yes, many lenders allow prepayment of the business loan, either partially or in full. Prepaying the loan helps reduce the outstanding principal and interest burden. However, some lenders may charge prepayment penalties or processing fees, so it’s essential to check with your lender before making any early repayments.
The normal duration of a business loan is one to five years. However, some lenders may offer loans with longer tenures, especially for larger loan amounts or secured loans. Longer tenures may reduce the EMI burden but increase the overall interest cost.
While the interest rate is the most visible cost, business loans may also have other hidden charges, including:
- Processing fees.
- Documentation charges.
- Late payment fees.
- Prepayment or foreclosure charges. Always read the loan agreement carefully and ask your lender about any additional fees.