The interest accrued on the loan amount availed by the business owner to run and expand business activities is known as business loan interest rate.
No, the principal amount doesn’t form the income part of the business. Only the interest paid on a business loan is a tax-deductible expense.
Buying a business can either be in way of investment or meant to support another business enterprise. If the business bought is used to run the business actively, then the interest on the loan amount will be tax-deductible. However, if you do not intend to keep the business operational, the interest amount will not be tax-deductible.
When a business or individual decides to refinance a credit obligation, they wish to make revisions in their interest rate, payment schedule or any other term in the contract. Refinancing can help save money in the long term, but if the money of the second loan is used to pay back the first lender, it won't be considered a business expense and the interest paid for the first loan will not be tax-deductible. However, the interest paid back on the second loan will be tax-deductible.
Business loans can prove to be a turning point for an entrepreneur or a seasoned business owner. The capital can either be used to expand operations or set up a new business and the tax benefit on business loan via interest payment and certain business expenses such as wages or bonus paid to employees can make the decision to avail a business loan, a quick one. Entrepreneurs can apply for a Bajaj Finserv Business loan, available on Finserv Markets, which is simple and easy. Your loan application on Finserv MARKETS can be approved in just 3 minutes and the whole process requires minimal documentation.
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.