How does a tax finance loan work?

A Tax Finance Loan allows individuals or businesses to meet their tax obligations on time by spreading the cost over several months. Here’s how it works:

• Loan Disbursement: Once your application is approved, the financial institution either disburses the loan directly to your bank account or pays the tax authority on your behalf.
• Repayment Structure: You repay the loan through Equated Monthly Installments (EMIs), which are easy-to-manage payments that include both principal and interest.
• Loan Tenure: Typically, loan tenures range from 6 to 12 months, depending on the financial institution and the amount borrowed.
• Interest Rates: Interest rates vary based on your credit profile and the financial institution's terms. Borrowers with higher credit scores may receive more favorable interest rates.

By opting for a tax finance loan, businesses and individuals can avoid hefty one-time payments and reduce the financial strain during tax season.
Most financial institutions offer quick processing times, so you can cover your tax liabilities without delay.