The business loan interest rate in Chennai is highly competitive that everyone desires to get. In order to fulfill your entrepreneurial dreams, getting a start-up business loan from private finances is considered an ideal choice. Most of the individuals shift to Chennai with the dream of becoming an entrepreneur. Based on your annual turnover the interest rate for small business loans varies. RG enterprises, being one of the most renowned private finance in Chennai, helps solve the financial crisis of most of the entrepreneurs by making business financing in Chennai as easy as possible. Based on the amount sanctioned, the business loan interest rate in Chennai varies.
There are a few reasons why people choose unsecured business loans.
- They are collateral-free though the interest rate is comparatively higher than secured business loans
- The processing fee is less and the loan amount is dispersed in a short span of time
- It has flexible pre payment options
How is interest calculated based on business loan?
The interest can be calculated as either a flat rate or a diminishing rate. Among these two, most people prefer the second one as your principal loan amount gets reduces as you start paying the instalments. However, it is essential to have a piece of proper knowledge about how the interest rate is calculated. Considering the loan amount, CIBIL score of the person applying for a loan, financial statement, and age of the business, the interest rate is calculated. As the amount is withdrawn from the principal amount, the interests will further be reduced. One can pay the interest as EMI’s. Hence, it is best to avail small business loans or finances for businesses with lower interest rates.
What is the interest rate for unsecured business loan?
Unsecured business loans in Chennai are offered solely based on the credit history of the applicant, their income, financial statement, and the like. Unsecured business loans do not require any collateral, unlike the secured business loans. Unsecured business loans are highly preferred when one wants to apply for a start-up business loan. The interest rates for unsecured business loans start from 14.9 % onwards.
Factors affecting business loan interest rate
The following factors are to be carefully considered before you apply for a business loan. They are
CIBIL score – the creditworthiness of the person applying for a loan can be determined based on the CIBIL score. The higher the CIBIL score is, the greater its chances of getting a business loan, and the lower will be the interest rate.
Type of business – the business loan interest is also determined based on the type of business and the finance for business is availed accordingly.
Lender – based on the lender who is availing the loan, the interest rate varies. Thus, when you plan for getting a loan for a business, it is essential to choose the lender carefully. These lenders can be either traditional or modern lenders.
Collateral – collateral plays a major role in calculating the interest of the business loan. This is considered the major requirement in securing business loans. Not all business persons are ready to offer collateral as it will greatly affect the interest rate. However, you can consider choosing lenders who can offer collateral at a low interest rate and RG enterprises are one among them.
Financial health – financial health is another important factor when you apply for business financing in Chennai. Financial statements, balance sheets, profit and loss details about the business are used to determine the business loan interest rate in Chennai.
All the above–mentioned factors are to be carefully considered in calculating the interest rate for unsecured loans when you apply for a loan for business.