1) Is Pre closure allowed in business Loans ?
Some banks have a lock-in period of 6 months to a year while some banks allow you to pre close even after the 1st EMI has been debited from your bank. There may also be restrictions that you can only use your own funds (and not the balance transfer cheque of another bank) to pre close a loan. In addition, banks may allow pre closure at no cost or may levy a pre closure fee (charges would vary from Bank to Bank).
2) Is Part Payment allowed in business Loans ?
Some banks allow part payment. However, there can be restriction on how many times in a year you can part pay and the minimum and maximum amount that you part pay.
3) How does business loan repayment happen ?
All business loan repayments happen in the form of an EMI (Equated Monthly Installment) through the customers bank account. The customer needs to give few PDCs (Postdated cheques) and sign an ECS mandate in favour of the bank disbursing the loan.
4) What is the minimum and maximum loan limit offered for Business Loan ?
Generally, the minimum amount loan amount is Rs 100,000 and maximum amount is Rs 50,00,000. Higher loan amounts are dependent on a personal discussion that a bank may want to have with the borrower and then take a call on the loan amount.
5) What is the maximum years of business loan?
Usually, an unsecured business loan can be availed for up to five years. This is the maximum repayment period for collateral-free business loans. The upper limit of the tenure is utilised by enterprises when they take a large sum, say Rs 30-50 lakh.
6) How is a business loan disbursed?
Depending on the lender's process, the loan amount may be transferred directly to your business account or provided as a physical check. Electronic transfers are more common and efficient, ensuring quick access to the funds.
7) How loan does it take to disburse business loan?
The loan is disbursed within 48 hours of loan approval into the borrower's bank account. The business loan's interest rate is attractive and affordable to ensure the repayment doesn't create a financial burden.
8) How much is the Rate of Interest and Processing Fee for business loan?
The rate of interest varies from 16% to 23% and a processing fee of upto 2.5% of the loan amount. In addition some banks insist on an insurance cover also.