7 Factors That Determine Your Business Loan Interest Rate
Do you have a small business lacking funds, and you want to liquidate your assets? You can always opt for a business loan and get a considerable amount.
But whenever you take a loan, you need to pay interest charges as well. And business loan interest rate charges are not an exception. On that note, it would be right to know about a few factors affecting your business loan interest rate.
- The loan amount
Based on your eligibility and other factors, you can get up to Rs.45 lakh from top lenders. The higher is your loan amount; the higher will be your business loan interest rate charges.
- Your CIBIL score
If you have a healthy CIBIL score of 685 or more, you can get the loan approval at a lower business loan interest rate. It is because lenders consider a timely repayment from you. Making timely repayments towards your loan and other debts can maintain a higher credit score.
- Repayment history
If you have been regular with the repayment of your earlier and active debts, you can enjoy an affordable business loan interest rate.
- Debt to income ratio
If you are already paying a large part of your income towards repayments, you may not get the loan approval. Even if you get it, it may be at a higher business loan interest rate.
- Your repayment tenor
Choosing a longer tenor may help you to repay a smaller EMI amount, but your business loan interest rate charges will rise. On the other hand, a smaller tenor may increase your EMI amount but pave the way for significant savings on interest charges.
- Your age
If you are a young loan candidate, you may get a lower business loan interest rate. It is because you have more workable years to repay the debt. An aged applicant may have to deal with a business loan interest rate since workable years are lesser.
- Business vintage
A majority of business loan lenders want you to maintain a vintage of at least 3 years to provide you with the required loan approval. It means that your business is well established, and you may repay the loan without default. If anything is less than this business vintage, it means being unable to get the loan approval. Even if someone gets the approval, the business loan interest rate charges are bound to be higher to negate the default risks.
If you are able to consider these things, you can easily manage to pay either a lower or a higher business loan interest rate.
Along with these pointers, you can start using the business loan interest rate calculator. This way, you can come across the precise business loan interest rate charges that you have to pay per month over a tenor.
Using the business loan interest rate calculator is easy and free. This tool is available on a lender’s website that you want to apply for the business loan with. You can use it as and when you need it because it works round the clock. In turn, it makes the business loan planning super smooth and less time-taking.
To make the process simpler and less time-consuming, lenders like Bajaj Finserv offers personalised loan offers on its products such as business loan, personal loan, home loan, etc. You can simply avail of these pre-approved deals by sharing your contact details.