About Business Loan

Unsecured BL provides business owners to get access to funds to run business at attractive rates. Hassel free process, tension free business.
1. Principal
The amount borrowed is called as principal. For example, if one apply for a personal loan of Rs. 100,000 that amount is the principal.
2. Interest
Interest is charged on the outstanding principal.hence in India PL is calculated on reducing method. A few financial institutions may charge on flat method.
3. Reducing Rate of Interest
Every month a borrower pays an equated monthly installment. The installment carries a principal and an interest component. With every EMI principal gets reduced and the emi is calculated on reduced principle hence it is called reducing method.
4. Flat Rate of Interest
In this type the interest is calculated always on the initial principle amount. The flat ROI are generally expressed as less than Reducing rates. One should be aware of this before taking a personal loan.
5. EMI
Equated Monthly Installment. It is the fixed amount that one pay on a fixed date every month.
6. Annual Percentage Rates or APR
APR is the maximum rate that a bank or financial installment charge on a personal loan taken . It generally varies from 15%* to 36%* for unsecured BL.
7. Tenure
Tenure for an unsecured BL varies from 12 months to 36 Months.
8. Processing fee
Processing fee for BL varies from 1% to 5% depending upon financial institutions. PF is deducted from loan not taken in advance.
9. What are the things required to become eligible for a BL
a) Business should be more than 3 Years old
b) The business owner should have either the home or his shop or any other property in the city in which he is applying for a loan.
c) He should have a valid business liscence like , Udyam, GST, Shop and establishment (Gomastha) etc.
d) Current account
10.Foreclosure
Banks generally allows borrower to close the loan before the tenure is over , after payment of 6 months to 12 months emi. This rule varies from bank to bank and one need to check with the bank before applying.
11.Partpayment
Part payment is not allowed by most of the banks but few new age banks are also allowing part payment . Please check before applying.
12. Documents
a) PAN CARD
b) ADHAAR CARD BOTH SIDES
c) PHOTOGRAPH
d) 3 years ITR including computation , Balance sheet and profit and loss CA certified
e) 1 Year bank statement of current account
f) Valid business proof like GST certificate, Gomastha Shop and establishment, udyam or trade liscence etc.
g) Address proof of business

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