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Business Loan Rate of Interest
Interest Rate is a percentage of the Principal Business Loan amount payable to the lender as charges for borrowing. This Rate of Interest typically applies on the principal amount on an annual basis, which may be known as the Annual Percentage Rate or APR.
| Bank Name | Interest Rate | Processing Fee |
|---|---|---|
| HDFC Bank Ltd | 15% | 1.00% |
| IDFC First Bank | 15% | 1.50% |
| ICICI Bank | 15% | 1.50% |
| Axis Bank Ltd | 15% | 1.50% |
| Bajaj Finance Ltd | 17% | 2.00% |
| Fedfina | 17% | 2.00% |
| Fullerton | 17% | 2.00% |
| Poonawala | 18% | 2.00% |
| Tata | 18% | 2.00% |
| SMC Finance | 19% | 2.00% |
| Indifi | 20% | 3.00% |
| Lendingkart | 19% | 2.50% |
| Dhanvarsha Finvest Limited | 21% | 2.00% |
| Loantap | 21% | 2.00% |
| Neogrowth | 24% | 3.00% |
| Aditya Birla Finance Ltd | 18% | 2.00% |
| Hero Fincorp | 18% | 3.00% |
| Loan Frame | 18% | 2.00% |
| Growthsource | 24% | 2.00% |
| IndusInd Bank | 18% | 2.00% |
| Kotak Mahindra Bank Ltd | 15% | 2.00% |
| Standard Chartered Bank | 16% | 2.00% |
| UGRO | 18% | 2.00% |
| Yes Bank | 16% | 2.00% |
| Edelweiss | 18% | 2.00% |
| Axis Finance | 18% | 2.00% |
Business Loan Interest Rate Types
Banks and NBFCs offer two types of interest rates, namely fixed and floating. The EMI amount changes according to the type of interest rate a borrower chooses.
Fixed-Rate of Interest
When you opt for a Fixed Rate of Interest, the interest rate on your Business Loan remains constant throughout your loan period, and this allows you the freedom to plan your finances.
Floating Rate of Interest
Floating Rate of Interest changes according to the RBI lending benchmark, namely Repo Rate. This means, that although your EMI remain constant, your loan tenure may extend due to rate adjustments.
How to Calculate Interest on Business Loans
You may calculate Annual Interest on your Business Loans by using the following formula for calculating Simple Interest
SI = P x R x T / 100
Where:
P = Principal Amount, or Loan Amount
R = Rate of Interest or ROI
T = Time Period of the Loan
SI = Simple Interest
To calculate Monthly Interest on your Business Loan when the loan period indicates months, use the following formula
SI = P x R x T / 100
To calculate the Amount Payable with Interest Rate at the end of tenure the end of the maturity period, use the formula mentioned below
Total Amount Value = P x [1 + (R x T)]
What are the Factors Affecting Business Loan Interest Rates
Nature of Business
Your lender will requires you to state the nature of your business to comprehend the profitability of your enterprise and decide the interest rate chargeable to you.
Business Vintage
Well-Established businesses operating for a long time are like to receive better terms and conditions in by way of lower rates of interest.
Turnover
High turnover reflects the state and health of your business, which in turn secures you a better and affordable Business Loan with better rates of interest.
Credit Score
Your Credit Score reflects your financial health, and the future of your finances. Therefore, a high credit score naturally deserves better rates of interest.
