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Business Loan
Interest Rates & Fees

Business Loan

Are you in need of funds to take your business to the next level? Hero FinCorp offers business loans at affordable interest rates.

What is a Business Loan Interest Rate?

Every business needs funds for growth, expansion, digitalisation, and sometimes to meet operating costs. In such situations, a business loan can prove helpful. It is a financing option that enables companies to expand or meet their current business demands such as machinery purchase, staff expansion, and working capital requirements. In return, you pay the interest rate on the borrowed money over a set period.
However, before availing of a business loan, you must know all about different types of SME business loan interest rates, charges, and the factors that determine your business loan rate of interest. Let us look at them in detail:

Hero FinCorp Business Loan Interest Rates

At Hero FinCorp, we offer the most competitive and cost-effective interest rate on a business loan in India. Depending upon the various factors and risks involved in lending, our business loan rates go up to a maximum of 26%. In addition, we let you choose between the two types of small business loan interest rates—fixed and floating.

Types of Business Loan Interest Rate in India

The rate of interest of a business loan is usually based on the loan amount and tenure. As a thumb rule, the longer the loan tenure, the higher will be the interest component. The two types of small business loan rates are:

Hero FinCorp Business Loan Fees and Charges

At Hero FinCorp, the fees and charges associated with business loans are kept at a minimum. Refer to the table below for more details:

Fees and Charges Amount (in Rs)
Business Loan Processing Fees As mentioned in the sanction letter
Pre-payment Charges
  • Allowed only after 12 months of the loan sanction
  • Charges will be applicable as mentioned in the sanction letter
Repayment Swap Charges 5000+GST
Loan Rescheduling Charges 5000+GST
Bounce Charges (per transaction) 5000+GST
Default Interest 2% of loan overdue amount per month
Account Statement/ Amortisation Schedule NIL
Foreclosure Letter Issuance 1000+GST

How to Calculate Interest on Business Loans?

To calculate your interest rate on a loan for business, you can use two methods—the flat rate method or the diminishing rate method.

Flat Rate Method:

Under this, the interest rate for a business loan is computed on the initial business loan amount. Regardless of how many instalments you have paid, it does not consider the outstanding principal amount. To calculate the business loan interest rate through this method, use the formula below:
Interest Payable = (Principal Amount х Interest Rate х Repayment Term) / 100

Diminishing Rate Method:

Under this, the rate of interest for a business loan is calculated on the outstanding balance and not the entire initial loan amount. To calculate the business loan interest rate using this method, use the following formula:

EMI = [P x R x (1+R)^N] / [((1+R)^N)-1)]
Where,
P stands for the loan amount
R stands for the interest rate
N means loan tenure

Business Loan Interest Rate Calculator

You may use the online business loan EMI calculator to calculate the business loan interest rate easily. You can use this calculator to estimate the total interest due at the end of the loan term. To utilise this calculator, simply enter three variables—principal amount, interest rate, and loan tenure, and then click the submit button.

The result will give you the amortisation schedule; a clear picture of the amount of interest you will be paying each month.


Loan Detail

Select Loan Amount

Min ₹ 3,00,000

Max ₹ 40,00,000

Interest Rate

15 %

Min 15%

Max 30%

Select Loan Repay Duration

12 Months

Min 12 Months

60 Months

Your Estimated EMI

₹ 4477

Business-loans

How to Get the Lowest Interest Rate on Business Loan in India?

Do the following to get the lowest business loan interest rate in India,

  • Maintain a healthy credit score by paying your existing debt EMIs on time.
  • Avoid switching your business and be stable in your existing business
  • Maintain a regular flow of income and focus on increasing your business's annual turnover and revenue.
  • Properly maintain your business financial record and get them audited, if necessary, by a certified professional such as a Chartered Accountant.
  • Maintain a positive relationship with your lender so that you can receive the best loan terms and offers in the future.

Factors Affecting Small Business Loan Interest Rates in India

Some of the common factors that impact the interest rate for business loans in India are:

Frequently Asked Questions

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