- The loan can be availed by self-employed professionals like doctors, chartered accountants, company secretaries, architects, and non-professionals like traders, manufacturers, etc., and entities which include partnerships, limited liability partnerships, private limited companies, closely held limited companies, etc.
- The business may be required to have a minimum turnover of Rs.40 lakhs.
- Minimum 3 years’ experience required in the current business. Minimum 5 years of total business experience is required.
- The business should be making a profit for the last 2 years.
- Minimum Annual Income (ITR) of Rs.1.5 lakh per annum is required.
- Applicants should be between the ages of 25 years and 55 years. This may vary from lender to lender.
- IT returns for the last 2-3 years should have been filed.
What are the costs involved in a business loan?There are two primary cost factors involved in a business loan - the interest and the fees which the borrower has to pay while availing the loan. The interest is an additional sum of money which has to be paid by the borrower to the lender and the additional fees paid by the borrower is known as the 'processing fees'.
What is a loan processing fee?A loan processing fee or a loan application fee is the amount paid by the borrower to the lender for processing a loan application. It is an upfront cost that is paid by the borrower for the paperwork involved in the process. Usually, banks/other financial institutions charge a fee of 2.5-3% on the principal amount for processing a loan application. This fee is non-refundable in nature and it is a one-time cost.
A business loan comes with plenty of benefits but at the same time involves a few costs as well. These costs are to be undertaken by the borrower for the services granted by the lender. The processing fees for any loan application is usually deducted from the total loan amount initially. Following the disbursement, the borrower is liable to pay the EMIs which occur at a monthly interval and include repayment of your principal and the interest amount. You can walk into the nearest branch of your bank or enquire online about the costs that are involved in availing a business loan and accordingly plan on how much you want to apply for.
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The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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