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Lowest Interest Rate Business Loan

Banks with lowest Business Loan Rates

Last Updated 18th Oct 2021

  • Currently, DCB Bank offers the lowest business loan interest rate of 9.25% and hence, is one of the best banks for the business loan.
  • The bank charges a processing fee of Upto 2% of the loan amount.
  • In addition, DCB Bank business loans can be availed for a maximum tenure of 60 months.
Banks Interest Rate Processing Fees Loan Tenure
DCB Bank 9.25% Upto 2% of the loan amount 60 Months
Dhan Laxmi Bank 10.50% Upto 3% of the loan amount 60 Months
Indian Overseas Bank 11.00% upto 3% of the loan amount 60 Months
SBI 11.20% From 2% to 3% 48 Months
HDFC Bank 11.90% ₹ 499 48 Months
Apply for Business Loan @ 14.00%*

Low Interest Business Loan

At present, SBI offers the lowest rates on business loans starting at 11.20%. To get the lowest business loan interest rate in India, you must compare the business loan rates of top banks. Along with that, you must also make a detailed comparison of various other business loan charges, including processing fees, prepayment & foreclosure charges. The loan amount sanctioned under business loan can be used for day-to-day funding expenses of the business, purchasing plant & machinery, or building infrastructure, amongst other reasons. The table below mentions the top 10 Banks/NBFCs with the lowest business loan rates.

Bank/NBFCRate of InterestProcessing FeesPrepayment & Foreclosure Charges
DCB Bank 9.25 % -16.00% Upto 2% of the loan amount Allowed after 6 EMI's, 7-36 Months: 4%, >36 Months: 6%
Dhan Laxmi Bank 10.50 % -13.10% Upto 3% of the loan amount Allowed after 6 EMI's, 3%
Indian Overseas Bank 11.00 % -15.00% upto 3% of the loan amount Allowed after 1 EMI's,
SBI 11.20 % -16.30% From 2% to 3% Allowed after 0 EMI's, 3%
HDFC Bank 11.90 % -21.35% ₹ 499 Not allowed
OBC 11.95 % -% 0.50% of Loan Amount Allowed after 0 EMI's, Nil Prepayment Charges
Lendingkart 12.00 % -24.00% 2% to 3% of loan amount Not allowed
IDBI Bank 12.25 % -13.50% 1.00% Allowed after 1 EMI's,
PNB 12.65 % -15.65% 1.8% + taxes Allowed after 0 EMI's, Nil prepayment charges
Syndicate Bank 12.65 % -13.65% 0.5%, Min Rs. 500 Allowed after 0 EMI's, Nil prepayment charges

How to Avail Business Loan at Lowest Interest rate?

Here are some more tips that will help you to avail best interest rates for business loans:

  • You must maintain financial stability along with good loan repayment history.
  • Check your free credit score regularly and improve your CIBIL score up to 700 or above.
  • To Improve your creditworthiness, you must repay all your credit card dues and EMIs on time.
  • You should apply for a long-term business loan to avail of a loan at low rates.
  • Having a good relationship with the bank also helps to avail of a loan at a low rate.
  • Submit all the required documents that furnish correct information, authentic and audited by CA.
  • You must submit valuable collateral or security if required for a secured business loan.

Banks Offering High Value Loans

Business loans are offered by various Banks and Non-Banking Financial Companies (NBFCs) at varying terms and conditions. Amongst all business loan lenders some offer discounted interest rates for high value business loans above ₹ 20 Lakh. The list of top ten lenders that offer the lowest business loan interest rates on loan amount above ₹ 20 Lakh are listed below:

Bank name Interest Rate Processing Fee Loan Amount
SBI 11.20% From 2% to 3% ₹ 1,00,00,00,000
Corporation Bank 13.55% 1.5%, Min Rs. 500 ₹ 5,00,00,000
Dhan Laxmi Bank 10.50% Upto 3% of the loan amount ₹ 5,00,00,000
OBC 11.95% 0.50% of Loan Amount ₹ 2,00,00,000
Lendingkart 12.00% 2% to 3% of loan amount ₹ 1,00,00,000
Ftcash 18.00% 2% of loan amount ₹ 1,00,00,000
Kotak Bank 16.00% Maximum 2% of the loan ₹ 75,00,000
Yes Bank 16.25% Up to 2% ₹ 50,00,000
HDFC Bank 11.90% ₹ 499 ₹ 50,00,000
Tata Capital 19.00% From 1.50% to 2.50% ₹ 50,00,000

Thus, on the basis of the loan amount, SBI offers the lowest business loan interest rate of 11.20% for high value loans above ₹ 20 Lakh.

Banks Offering Loans at Low Turnover

A number of business loan lenders offer customized loans to small business owners who own a business unit with a minimum turnover of ₹ 6 Lakh and above. So, even when your business is set up on a small scale, you can avail a business loan. Some of the lenders offering lowest interest to businesses with low turnovers are listed as follows:

Bank Interest Rates Minimum Turnover
Lendingkart 12.00% ₹ 90,000
Ftcash 18.00% ₹ 6,00,000
IDFC First Bank 19.00% ₹ 12,00,000
Bajaj Finserv 18.00% ₹ 12,00,000

Lendingkart offers the lowest business loan interest rate to small business owners starting from 12.00%. The bank charges a processing fee of 2% to 3% of loan amount and allows borrowing the fund for a maximum tenure of 3 years.

Banks Offering Loans at High Turnover

While there are some business loan lenders that provide loans even at low business turnover, some lenders prefer lending business loans only to business units that hold a turnover above ₹ 50 Lakh. So, if you are business loan borrower with a high business turnover above ₹ 50 Lakh, some of the banks offering the lowest interest rates are as follows:

Bank Interest Rates Minimum Turnover
HDFC Bank 11.90% ₹ 1,00,00,000
RBL Bank 18.50% ₹ 1,00,00,000
Tata Capital 19.00% ₹ 1,00,00,000
Yes Bank 16.25% ₹ 1,00,00,000
ICICI Bank 16.50% ₹ 60,00,000

Currently, HDFC Bank offers the lowest business loan interest rate of 11.90% to business units with high turnover above ₹ 50 Lakh.

Banks Offering Business Loan to Low Business Experience

Most of the business loan lenders ensure the stability of a business by taking in consideration the business experience of minimum three years. However, there are various lenders that offer a business loan to existing businesses with a vintage of below three years. Some of the banks that offer business with minimum business stability are listed as follows:

Bank Interest Rates Processing fee Minimum Business Existence
Corporation Bank 13.55% 1.5%, Min Rs. 500 1 Years
PNB 12.65% 1.8% + taxes 1 Years
Andhra Bank 15.75% Case to Case 1 Years
Lendingkart 12.00% 2% to 3% of loan amount 1 Years
Neogrowth 24.00% Upto 3% of loan amount 1 Years

Thus, Lendingkart offers the lowest interest rate of 12.00% to existing businesses with low business experience of 1 Years.

Banks Offering Business Loans based on ITR

Business loan lenders consider and evaluate the ITR in order to assess the profitability of the business unit and the savings and investments portfolio. Thus, ITR is an important eligibility parameter for availing a business loan and most lenders seek a minimum ITR of two years. However, some lenders even lend business loans with a minimum ITR of one year.They are listed as follows:

Bank Interest Rates Processing fee Minimum ITR
Lendingkart 12.00% 2% to 3% of loan amount 12 Months
PNB 12.65% 1.8% + taxes 12 Months
Allahabad Bank 14.50% Rs. 229 - per lac, Min Rs. 2,038 Max Rs. 22,928 12 Months
Andhra Bank 15.75% Case to Case 12 Months
RBL Bank 18.50% 2.50-3.00% of loan amount 12 Months

Thus, Lendingkart is the best bank for new business owners, who filed their ITR for only 12 months. The bank offers business loans at the lowest interest rate of 12.00%.

Compare Lowest Interest Rates of Best Banks

FAQs

Which bank is best for lowest business loan interest rates?

As per the current rates, DCB Bank is offering the lowest interest rate on business loan starting at 9.25% and is one of the best banks for business loan.However, based on processing fee, currently DCB Bank, offers business loans at lowest processing fee of Upto 2% of the loan amount.

Which bank is best for business loan based on low turnover?

Lendingkart is the best bank to take a business loan as it offers a business loan at a minimum turnover of ₹ 90,000 Other banks that offer business loans at low turnover are Ftcash, Bajaj Finserv and IDFC First Bank.

Which bank is best for business loan?

DCB Bank, Dhan Laxmi Bank, Indian Overseas Bank, SBI, HDFC Bank are considered as the best banks for a business loan as they are highly customer focussed and offer easy process and quick turn around on business loan. However, based on business loan interest rate DCB Bank is the best bank for business loan offering business loan at 9.25% currently.

What is the lowest rates on business loan overdraft facility?

Fullerton India offers lowest business loan rates on the overdraft facility starting at 17.00%.

What is a good interest rate on a business loan?

A good interest rate on a business loan is an interest rate that is lower than the national average. Currently, the lowest interest rate offered on business loans is 14.00%.

What are the factors that affect Low Business Loan Interest Rate?

Some of the factors that may affect your eligibility for a low business loan interest rate are CIBIL Score, business turnover and profitability, type of business, business plans for the future and collateral.

Can I negotiate with banks for Commercial Loan Interest Rates?

Yes, you can negotiate with banks for commercial loan interest rates if you have a good relationship with the bank along with sound business stability, revenue and CIBIL score. Chances of negotiation are more, if you maintain a savings or current account with the bank already.

What is the HDFC Business Loan Interest Rate?

As per the current rates, HDFC Business Loan Interest Rate starts at 11.90%. HDFC Bank also charges a processing fee of ₹ 499.


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