Shriram Business Loan: Your Complete Financing Solution
Business Loan Interest Rates and Charges
A business loan from Shriram Finance is a versatile tool that helps entrepreneurs and companies to invest in new projects, manage cash flow or expand their operations. But before you start your application with us, it is of paramount importance to understand the interest rates, and other fees and charges associated with the loan. This awareness can help you understand how much the business loan will actually cost you, which in turn, can help you make strategic borrowing decisions.
At Shriram Finance, we aim to provide clarity on business loan interest rates and charges, so that you can quickly get the funds you need to fulfil your business aspirations. With interest rates starting at just 10%* p.a., and minimal processing and foreclosure charges, Shriram Business Loan makes managing business expenses affordable.
Business Loan Interest Rates and Charges
Here is a breakdown of some of the most important rates and fees associated with Shriram Business Loan.
| Type of Fees | Applicable Charges |
|---|---|
| Interest Rate | Starting from 10%* p.a. |
| Processing Fees | Up to 5%* |
| Foreclosure Charges | Up to 4%* (Please note that the customer will not be allowed to foreclose the loan account within 12 months from the 1st EMI. Also, an additional 2% will be applicable if the loan is transferred to another financier.) |
Please note that the interest rates and charges of Shriram Business Loan depend on several market factors and Shriram Finance’s internal policies, and as such can vary. Please get in touch with us or go through the Interest Rate Policy document for the most updated information.
Tips to Get Low-Interest Business Loan
Getting your hands on a business loan from Shriram Finance at low interest rates can help you manage your EMIs effectively. Here are a few tips that can help you negotiate for competitive interest rates on Shriram Business Loan:
- Maintain a Good Credit Score:
Always aim to have a credit score above 750 to secure the best possible rates. The higher your credit score, the better are your chances of quick loan approval at favourable loan terms.
- Choose the Right Type of Loan:
Understand your requirements well and only then apply for the type of loan that suits your needs. This can help you maximise the benefits of Shriram Business Loan and help you make comfortable repayments.
- Demonstrate Financial Stability:
Shriram Finance assesses your business’s financial stability and performance before approving the loan. Providing proof of business stability and showing positive cash flow can help you secure a loan at low interest rates.
- Make a Larger Down Payment:
Offering a significant down payment can often result in securing more favourable interest rates and overall loan terms.
- Improve Your Debt-to-Income Ratio:
The debt-to-income ratio is the percentage that shows how well you manage your debts by comparing your monthly debt obligations to your gross income. Having a lower debt-to-income ratio shows that you can handle debts effectively, which in turn can help you get low rates on Shriram Business Loan.
- Maintain a Good Credit Score:
Factors Affecting Business Loan Interest Rates
Several factors affect the interest rates you would be eligible for on a business loan from Shriram Finance. Some of the factors are discussed below for your reference:
- Business Age and Financial History
Established businesses with a good financial history can qualify for more competitive rates compared to newer or less established businesses.
- Loan Amount
Larger loan amounts may attract a higher interest rate depending on the internal policies of Shriram Finance, due to increased risk. A smaller loan amount could benefit from lower rates.
- Loan Tenure
Just like the loan amount, a longer loan tenure could also attract higher rates and vice versa.
- Collateral
Providing collateral can also help you secure more competitive rates on your business loan as the perceived risk is usually low in secured loans.
- Industry and Market Conditions
Economic conditions, like changes in RBI’s policies, and industry-specific factors can also significantly impact the interest rates you’ll qualify for on Shriram Business Loan.
Importance of Credit Score in Securing a Business Loan at Low Interest Rate
A good credit profile is non-negotiable when it comes to securing competitive interest rates and favourable loan terms. The better your credit score, the higher are your chances of getting approved for a loan quickly. Here are some of the ways to maintain a good credit score:
Timely Payments
Ensure that all your loan and credit card payments are made on time to avoid late payment charges or defaults.
Low Credit Utilisation
Also ensure that your credit utilisation is well within the 30-40% range so that it shows that you can manage your finances effectively.
Monitor Credit Report
Regularly check your credit report to spot any inaccuracies or errors and rectify them promptly.
How to Reduce the Impact of High Business Loan Interest Rate with Prepayment
Reducing the impact of high business loan interest rates through prepayment can be an effective strategy. Here’s how you can go about it:
If you are planning for a foreclosure or prepayment, try making additional payments towards the principal amount well ahead in time to reduce the outstanding balance faster. This can help you decrease the total interest paid over the duration of the loan.
Always ensure that you have read the loan agreement thoroughly to be aware of all the additional charges. This can help you plan your prepayments effectively and reduce the impact of the charges as well.
How to Calculate Business Loan Interest
Calculating the business loan interest is simple when you use the Shriram Business Loan EMI Calculator. Follow these three steps to understand how much EMI and total interest you’ll end up paying over the loan tenure:
- Step 1: Enter your desired loan amount into the calculator.
- Step 2: Select the interest rate that you are eligible for.
- Step 3: Decide the loan tenure that you are comfortable with and enter the same.
In just seconds, the calculator will calculate the EMIs and your total interest outgo, thus, helping you manage your loan effectively.
Alternatively, if you want to calculate manually, use the following formula:
Where,
- EMI = Equated Monthly Instalment
- P = Principal Loan Amount
- R = Monthly Interest Rate (Annual Rate / 12 / 100)
- N = Loan Tenure in Months
Now, to calculate the total interest, subtract the principal amount from the total amount repaid, which is your EMI x N.
By using this formula, you can manually estimate the monthly instalments and your overall interest paid.
Business Loan Interest Rates and Charges: FAQs
How can I calculate business loan interest?
To calculate the total interest paid on your Shriram Business Loan, you can use our online calculator and enter your desired loan amount, applicable interest rate and tenure. Alternatively, for manual calculation, use the formula [P x R x (1+R)^N] / [(1+R)^N - 1], where P is the loan amount, R is the monthly interest rate and N is the number of months, to determine your EMI. Then subtract the principal amount from the total amount repaid (EMI x N) to calculate how much interest you would pay over the loan tenure.
What is the current business loan interest rate for Shriram Finance?
The current business loan interest rate for Shriram Business Loan starts at 10%* p.a.
What is the average interest rate for a business loan?
The average interest rate for a business loan in India can vary widely depending on the lending institution, the borrower’s financial profile and the loan terms.
What is the interest rate on an unsecured business loan?
Unsecured business loans from Shriram Finance start at 10%* p.a.
What are the processing charges for Shriram Business Loan?
The processing fees for Shriram Business Loan is capped at 5%*.
Is business loan interest rate fixed or floating?
Business loans from Shriram Finance have a fixed interest rate, which means the rate is constant throughout the tenure, irrespective of various market factors.
What is the interest rate of a secure business loan?
A secured business loan from Shriram Finance starts at 10%* p.a.
What is the preclosure or foreclosure charges for business loans?
Foreclosure of business loans at Shriram Finance is capped at 4%* on the outstanding principal amount.
Can you negotiate business loan interest rates?
Shriram Finance considers several factors like your credit score, revenue, collateral, etc., while setting interest rates. By showcasing strong financials, you may be able to negotiate better interest rates. But the final rate offered to you will be solely at Shriram Finance’s discretion.
Disclaimer
The information provided in this guide is for educational purposes only and should not be considered financial advice. Always consult with a financial advisor before making investment decisions related to fixed deposits or any other financial products.
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