When it comes to the repayment of a business loan, there is much more at stake than having your business credit score suffer. In case you are unable to repay the loan, you could end up losing access to future capital and it could have a negative impact on your business. Additionally, you could also get into legal trouble and damage the reputation of the business. Repayment of the loan should be your priority and you need to take steps to repay it on time.
Tips on repayment planning of your business loan
Here are a few effective tips to help you plan the repayment of your loan.
Create a loan repayment schedule
The requirement of working capital will be more than once in your business cycle. This means you might have to apply for a loan but the approval of the loan is not the end of the process. You need to create a repayment schedule as soon as the loan application is approved. Timely repayment of the loan will help you build a strong credit score. Before availing a business loan, make sure that you are aware of the interest rate and the monthly instalment that you will have to pay. You can calculate the EMI of your business loan beforehand by using an online business loan calculator. Having an estimate of your EMI will help you plan your monthly expenses wisely, thereby allowing you to make timely repayment of the loan amount. You can also set up an auto-debit system with your lender for the repayment of the loan. Business loans available at Finserv MARKETS come with flexible repayment options. Moreover, you can customize your business loan according to your requirements.
Consider prepayment of the loan
The lender will inform you about the possibility of prepayment of your loan. This means you can repay the loan before the end of the tenure. You can make a lump sum payment and close the entire loan in advance. Doing this will help you to save on the interest and strengthen your credit score. You need to ensure that the cash flow from your business is adequate to allow you to make the prepayment of the loan in advance.
Monitor your credit ratings
It is important to keep a check on the credit ratings and always inform the lender about the delay in payment. In case the loan is not paid on time or if there are constant defaults, you might be considered a defaulter. Hence, inform the lender about the reason behind late payment to avoid an impact on your credit ratings. Alternatively, you can opt for another repayment schedule if the current repayment plan is not working out.
Refinance the debt
You can consider the option of refinancing your outstanding debt into an affordable loan. With debt refinancing, you can enjoy a low-interest rate on the loan, which will make the repayment easier for you. However, you need to consider the importance and evaluate all the reasons before you take the step. You can choose to refinance the old debt if your business is doing well.
Consider the above-mentioned tips for repayment planning. Make sure every loan you take is a well-thought decision because it could be a strong step towards building a successful business and a strong credit score.
Business loans available at Finserv MARKETS have simple eligibility criteria and easy online application process.You can apply for a business loan from the comfort of your home. Bajaj Finserv lending rate of interest is quite competitive. Minimal and paperless documentation, Instant approval and quick disbursal of the loan amount are some of the added advantages of business loans available at Finserv MARKETS.
“Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no cost EMIs to 4 hours product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App”.