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Business loan FAQs

I am a self employed person. Can I apply for a business loan?

Yes. All banks offer loans to self – employed individuals in India and the amount that can be availed is as high as 20 lacs depending on your eligibility. You will need to provide copies of the filed Income tax return as proof for you income.

How to apply for a business loan?

There are multiple ways to apply for a business loan. You can walk into any bank branch of your choice and submit your application. The easiest, quickest and the most convenient way is to apply online. Sitting in the comfort of your home, you can choose from the best offers from various banks and apply in 3 simple steps. Not only that, on RupeePower, you get an instant in – principle approval and a bank official will visit you at your doorstep to collect any required documentation.

How is my eligibility criteria for a business loan determined?

Eligibility criteria is a combination of multiple factors like the income, CIBIL history, the company you work for, city your live in, age, risk appetite of the bank etc. Banks use a complex rule structure with these variables to arrive at the amount of loan they would want to offer a particular customer. For the same set of variables, it is possible for a customer to have different loan amounts being offered by different banks.

Why apply for business loan on RupeePower.com?

RupeePower is a financial services marketplace with a focus on helping customer find the best deal in the quickest time. On our platform, you can compare offers from multiple banks, see the loan amounts and interest rates offered and choose the deal you like the best. Not only that, you can apply online and get an instant approval. All this at the click of a button, at No cost at all.

How can I get an instant approval for a business loan?

You can get an instant approval on your loan application by applying on RupeePower. We have tied up with multiple banks and partners and built a online decision engine which is able to give you an instant approval. We use the data you fill up on the form along with details of your CIBIL report to calculate the loan amount.

Why take a business loan when I can opt for EMI on my credit card?

EMI on credit card is given against the existing credit line that a customer has on his card, and the credit limit is blocked for that amount and cannot be used for any further purchase transaction. For eg: If a customer has a Rs. 1 lac credit limit on his card and make a purchase transaction of 75,000 using EMI on credit card. In this scenario, the customer will be able to use his card for only 25,000 as the rest of the limit is blocked. The limit keeps getting release with every EMI payment made.

    The main disadvantages of using EMI on credit cards are:
  1. Transaction amount is restricted by the credit limit.
  2. Credit limit of the customer is blocked.
  3. Limited end use as once specific transactions can be converted into EMI.
  4. Limited re-payment tenure.

Business loan does away with all the above restrictions and is the best choice when it comes to short term borrowing with no hassles.

How can I make the repayment for my business loan?

Repayment of a business loan is done by issuing post-dated cheques for the entire tenure of the contract. The amount of the post-dated cheque would be the EMI. Some lenders also permit repayment option by way of standing instructions to your bank account or deduction at source from your salary every month. In a business loan it is necessary for the borrower to draw out the entire loan and the loan is repaid by way of fixed monthly installments.

What factors affect the interest rate I am offered?
    The lending rate depends on a number of factors:
  1. The amount of loan as compared to your income.
  2. Length of the repayment period you opt for.
  3. Credit Profile, which is judged from your CIBIL report.

Thus your ability to repay the loan determines the lending rate. Lending rates differ for different financiers and currently range from 11.99% to 28%. You will be able to find the best loan rates on RupeePower.

What to do If you are unable to pay the EMI for your loan?

It could happen that things do not go according to plan and you are unable to meet the EMI (equated monthly installment) commitments.
First step would be to try to convert the business loan from an unsecured to a secured loan against assets such as a house, car, mutual funds, and RBI bonds, gold, bank Fixed Deposits, life insurance policy, shares and debentures by asking the bank to restructure your loan. This should ensure that the EMI amount is reduced making it easier to make payments as the rate of interest charged on a secured loan is much less than on unsecured loan.
Just in case you feel that you are not gaining from the conversion you can pledge/mortgage the assets you have and obtain a new loan against them and then with that loan amount, pay-off your existing business loan.
But this does not mean that you will not do everything possible to repay the loan in the first place. Loan is a means to acquire something with help and not deceive a lender to waste the resources for unproductive use. So take loans and achieve all your dreams with financial help from lenders/banks. 

Which institutions offer Business loans?

In India most of the Nationalised, Foreign and Co-Operative Banks offer business loans. Besides banks, some other non banking finance companies and financial institutions also offer loans. Some of the prominent business loan financiers include HDFC bank, ICICI bank, Fullerton, Kotak Mahindra Bank, Standard Chartered Bank, Tata Capital etc.

About Business loan

What is a business loan?

A business loan is an unsecured loan where money is given by most banks or financial institution to customers without taking any collateral as guarantee . The terms and conditions vary from bank to bank and its best to compare offers across lenders before deciding to go for one. RupeePower allows you to compare from the best offers available in the market and applying online from the ease of your home.

What can I do with a business loan?

Business loans are usually taken to meet short term obligations like funding a holiday trip, marriage or home renovation. However, there is no restriction to what you can do with the money received as business loan. Once the loan is approved, the money is credited to the borrower’s bank account by the bank.

What are the requirements to get a business loan? How much loan can I get?

The criteria for approving a business loan varies for each bank. Banks usually use a combination of income, CIBIL score, residence stability, ability to pay the emi into consideration when approving the loan for a customer and deciding the loan amount that can be offered. Business loans can be availed for amounts as low as 1 lac to as high as 30 lacs. You can apply for a business loan on RupeePower and get an instant in-principal approval.

What are the tenures available for business loan?

The tenures offered for a business loan ranges from as low as 1 year to as high as 5 years. Choosing a higher tenure loan reduces the EMI burden and can in some cases increase the eligibility of the loan amount. On RupeePower, you can compare and see the amount available to you at each of the tenure and the rate of interest across various banks in India.

What are the charges payable? When do they need to be paid?

Apart from the interest on the loan, banks usually charge a processing fee during the loan application and a pre-closure fee when closing the loan before the end of the tenure.

How does a business loan impact my credit score?

A good credit score is one of the criteria for getting a business loan. Once the loan has been approved, timely repayments helps build and improve the credit score of the customer, which will be useful when applying for other products like home loan or credit card. However, any default in the repayment can adversely affect the credit score and can cause a problem when applying for credit in future.

Documents required

Identity proof

Passport, Voter ID, Driving license, PAN card, Photo attested by banker, Adhar card

Date of birth

Birth certificate, passport, secondary school certificate, PAN card

Photograph

One latest passport size

Residence Proof

Electricity Bill, Title Deed, Municipal Tax Receipt, Share Certificate (with Flat No),Adhar card

Registered Rent agreement (with utility bill), Land line bill,Post Paid Mobile Bill, Bank state., Passport, Driving License, Voter ID, company letter head(signed by HR or Admin)

Land line bills (Optional as per policy), Relationship Proof ( if bill is of relation as specified)

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