How much costly is Your Business Loan?by Saurabh Tiwari Digital Marketer & Freelancer
In this economic era, Banks and NBFCs offer Business loan to promote the commercial activities, even they all created a special department to fulfill the financial needs of the business. Getting Fund for the business startup or expansion is quite easy in India. Many lenders are there offering Business Loan with outstanding features, therefore, it’s very hard to find the best lender according to the low business loan interest rate.
In such cases the best financial consultants like Banknomics, Paisa Bazaar, Bank Bazaar etc. can help you in right manner. Banknomics is a leading brand who proves themselves as a one of the best financial consultant agency in India.
Business loan is a great way to grow the business. With a business loan, an applicant can get the required funds and use it to achieve new heights of success in their business. An applicant applies for a business loan to buy new equipment, machinery, real estate finance and much more.
Applying for a business loan is not a big deal but it’s quite important to understand the requirement of the business loan at right time. Whenever we apply for a business loan we just think about the interest rates but some other factors are there to be considered before applying for a Business loan. With all these factors we can find the approx cost of the business loan.
· Loan Tenure
· Hidden charges
· Flexibility of loan repayment
· Interest rate on the loan amount
· Processing and service charges
· Foreclosure and prepayment charges
It’s very important to understand the loan term offered by the Banks or NBFCs. A business loan with longer loan tenure cuts higher amount from the applicant’s pocket. In the longer tenure, a borrower pays higher overall cast. It’s only advisable who is not able to pay higher EMIs. Banknomics suggest their borrower apply for a business loan with less loan tenure.
The lender asks for the application fee, admission fee, credit report fee and many other hidden charges, with this, it is quite crucial to find out the total cost of the business loan. Most trusted lenders directly discuss this information with their customers. This helps the borrower to find out the actual cost of the business loan.
The flexibility of loan repayment:
In this competitive era lender offers lots of features and provide various flexibilities for the business loan applicants. Many lenders give an option to repay only the interest rate of the loan amount in the difficult time of their borrower (they suspends the principal amount for a period of time). Most of the Banks and NBFCs provide the pre-payment facility without any penalty.
The interest rate on the loan amount:
Interest rate of the business loan is an important factor to figure out the cost of the business loan. Banknomics suggest every applicant do proper research about the interest rates and other charges before applying for a business loan in India. Do your research and choose the best loan provider who offers best services at low cost.
Processing and service charges:
Apart from the hidden charges, loan tenure, and Interest rate, it’s very necessary to understand the term processing fee of the business loan. The lender charges 0.5% to 4% as a processing fee of the loan amount. Many lenders are also there who offers business loan at Zero processing fee. To understand this, an applicant can save up to 2%-4% of the loan amount.
Foreclosure and prepayment charges:
Bank and NBFCs offers an option of pre-payment or part-payment to reduce the financial pressure of the borrower. In this, a borrower needs to pay the penalty on the outstanding amount of the loan. Many banks do not charge and penalty on the pre-payment or foreclosure of the business loan.
Bank and NBFCs ask for some collateral against the Business loan amount. Many lenders offer Business loan even without any loan security but their interest rates are quite high as compared to the secured business loan.
Choose the right time for the right business loan. Consider the above factors to find out the cost of the business loan and keep them in mind when going to apply for a business loan in India.
Created on Oct 3rd 2017 08:03. Viewed 123 times.