The Banking and Finance sector in India has witnessed a tremendous growth in recent years. Therefore, availing a loan has become a hassle-free process in today’s time. Various financial institutions offer different credit products to cater to the financial needs of citizens across the country. One such credit product that has gained massive popularity is the small business loan. India is a growing economy, wherein a large number of entrepreneurs have established their own business. Running and expanding a business requires a large amount of capital and hence entrepreneurs avail small business loans to meet the fund requirement of their business.
One of the most important factors that you should consider while availing a business loan is the interest rate levied on it by the financial institution. Lower the interest rate, lower will be the repayment burden. However, if you have already availed a business loan, there are certain ways through which you can reduce the interest rate on your business loan.
Let’s have a look at some of the best ways to business loan reduce the interest rate on a small business loan
Refinance your business loan
Refinancing your business loan will help you lower the interest rate. You can consider transferring your outstanding loan amount to a lender that offers comparatively lower interest rate. This will reduce the monthly payment and allow you to manage your expenses in a better way. Refinancing of a business loan is a wise choice as it lowers the overall cost of borrowing in the long run.
Work on your credit score
Since a good credit score would allow you to get a business loan with a lower interest rate, it is always advisable that you must try to improve your credit score as much as possible. Though improving the credit is not an overnight thing, there are certain steps you must take for long term benefits:
- Catch up on outstanding payments
- Restrict the use of your credit cards.
- Be careful about closing your oldest credit cards.
A Substantial Vintage
- Financial institutions usually require a business to have a vintage of at least 3 years to sanction business loans.
- A substantial vintage increases the approval chances of a business loan. Additionally, it also allows entrepreneurs to negotiate on business loan interest rates.
- Part-prepayment allows the borrowers to lower the EMIs or loan tenure of the small business loan. Through part-prepayment, borrowers can repay a substantial part of the loan amount when they have ample funds in hand.
- This will allow the borrowers to make the loan tenure shorter, thereby reducing the overall amount paid towards interest repayment.
- It is to be noted that some lenders may charge an additional fee for providing the part-prepayment facility.
Bajaj finserv business loan on Finserv Markets come with part prepayment facilities and no foreclosure charges.
Opting for a Flexi Loan Facility
A Flexi Loan facility allows the borrowers to withdraw only the amount required from the predetermined loan amount and pay interest only on that utilized amount. Therefore, they don’t have to pay interest on the entire loan amount.
Another way to lower the interest rate on your business loan is to sign up for automatic payment.
While availing a business loan, you should always compare various loan offers provided to you by different financial institutions. This will allow you to avail a business loan that best suits your needs.
So what are you waiting for? It’s time you take the right initiative and cut down on the interest rate on loans for small business.
To promote the women entrepreneurs across the nation, leading financial institutions also provide business loan for women with lucrative features.
Many people hesitate to avail an MSME loan for new business, considering the hassle and repayment burden that comes with it. Borrowers also often worry about their credit score before applying for a business loan. However, with the help of Bajaj Finserv Business Loan available at Finserv MARKETS, You can get a business loan at the most competitive interest rate.
Flexibility in repayment, minimal documentation, and instant disbursal are some of the key features of Bajaj Finserv Business Loan. You can apply for business loan from the comfort of your home through a hassle-free online application process. Moreover, you can also customize your business loan to suit your needs in the best possible way.
You can also get to know about the benefits of taking a business loan.
Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment, and exclusive EMI store, all under one roof- anytime, anywhere!