With the expansion of the market and the emergence of new opportunities, business owners often feel the need to build funds. Business loans stand out as a prevalent approach for owners to obtain finances without relinquishing a share of their business or depleting their savings. However, one of the most important factors influencing the repayment of these loans is the interest rate.
The interest rate is the cost of borrowing funds and it determines how much you have to repay over the loan tenure. A lower interest rate means a lower EMI and a higher savings for your business. Therefore, it is important to understand what influences your business loan interest rates. And, planning ahead can help you get a good rate, making the loan cost-effective.
Here are 5 factors that affect the interest rates on your business loan:
• Your credit score: Your credit score is a numerical representation of your creditworthiness and repayment history. A higher credit score indicates a lower risk for the lender and hence, a lower interest rate for you. To be eligible for a business loan from Bajaj Finance, you should have a credit score 685 or higher.
• Your business profile: Your business profile includes various aspects such as - type of business, industry, size, profitability, and the cash flow. All of these factors can influence your business loan interest rates and borrowing terms.
• Your loan amount and tenure: The loan amount and tenure are the two main components of your loan repayment. The loan amount is the total amount of money that you borrow from the lender and the tenure is the duration over which you have to repay it. Generally, a higher loan amount means a higher interest rate and a longer tenure means a lower interest rate. You can get a loan amount of up to Rs. 50 lakh at competitive interest rates with Bajaj Finserv Business Loan.
• Business vintage: The impact of a business's history and vintage on loan interest rates is substantial. An established business with a proven track record is likely to secure lower interest rates due to the confidence it instils in lenders. Demonstrating a solid business history and vintage can lead to more favourable loan terms and interest rates. To be eligible for a Bajaj Finserv Business Loan, your business must have a minimum vintage of 3 years.
• Market conditions: The market conditions are external factors that affect your business loan interest rate. These factors are beyond your control but you should be aware of them and monitor them regularly to take advantage of any favourable changes or avoid any unfavourable ones.
How to apply for a Bajaj Finserv Business Loan
You can easily apply online for a business loan from Bajaj Finance by following the simple steps mentioned below:
· Visit the Bajaj Finserv Business Loan page.
· Access the online application form.
· Enter your 10-digit mobile number and OTP.
· Fill in the application form with your basic details, such as your full name, PAN, date of birth, and PIN code.
· Once you enter all your details, please click on ‘PROCEED’ to visit the loan selection page.
· Enter the loan amount that you need. Choose from our 3 business loan variants – Term, Flexi Term, and Flexi Hybrid.
· Choose the repayment tenure – you can select tenure options of 12 months to 96 months and click on ‘PROCEED’.
· Complete your KYC and submit your business loan application.
Our representative will guide you on the next steps. The loan amount will be transferred to your bank account upon verification of your documents.
To sum up, your business loan interest rate depends on various factors that relate to your creditworthiness, your business profile, your loan amount and tenure, the type of interest rate, and market conditions. By understanding these factors and by planning in advance, you can secure lower interest rates for your business loan, leading to long-term savings.