- Know about business loan interest rates and charges
- Different factors that affect interest rates of ICICI Bank Business Loan
- Get some important charges in details.
ICICI Bank Business Loan Interest Rates – Business loan is secured and or maybe an unsecured loan. You can use business loans for business purposes such as renovation, expansion, construction, buying a new office and more. ICICI Bank Business Loan up to ₹ 2 crores can be taken at flexible tenure. On the other hand, it also offers a business loan without collateral.
ICICI Bank Business Loan Interest Rates and Charges
|Processing Fee||Up to 2% of the loan amount + Taxes|
|Interest Rate||For secured facilities- Repo rate up to + 6.0% (non PSL)|
For features supported by CGTMSE- Repo rate up to + 7.10%
|Other statutory & stamp duty charges||According to the applicable laws of the state|
|Bank guarantee and|
Commission on letter of credit
|Up to 2% Commission|
|Commitment Fee||Average usage <60% - 0.50%|
Fees will be levied on quarterly basis
Applicable only for CC / OD facility
|Foreclosure Charges||4% of the loan amount|
Explanation of Some Common Charges
Processing Fee – The processing fee is the fee that the borrower charges on the business loan application. When your loan application is accepted, you have to pay some percentage of the loan amount to the bank. This fee is a one-time fee that the applicant must pay to process the loan amount. The amount of processing fees depends on the bank.
Interest Rate – The interest rate is a percentage of the amount charged by each lender that a borrower must pay to use the principal amount. The interest rate is usually referred to as the annual percentage rate (APR) on an annual basis.
Foreclosure Charges – A foreclosure is the full repayment of your balance in a single payment instead of paying the equated monthly payment (EMI). Different banks have different foreclosure charges.
Commitment Fee – Commitment fee is a fee that can be charged from a borrower that he has agreed to lend money to. Basically, it is charged for lines of credit. This fee is a way of guaranteeing the money available to the bank.
Some Important Factors that Affect Business Loan Interest Rate
If you are wondering why the same lender offers different interest rates then here are some factors in which you can understand clearly.
Business Experience – The Business Loan Interest Rate also depends on how long you have been running the business. Basically, it shows stability and continuity in your business and how risky it is to lend money. If your business is for less than 3 years, the lender may charge a higher interest rate while a lower interest rate if your business is stable and profitable.
Collateral – Secured and unsecured loans are decided on the basis of collateral. If you want an ICICI Bank Business lower interest rate then you need to keep your personal or business assets as collateral. While unsecured loans do not require any type of collateral. So the interest rate will be higher than a secured loan.
CIBIL Score – If the borrower has a high credit score then one can easily get a loan at a lower interest rate. Basically, your credit score indicates how much risk you are in paying off the loan. If you have a low credit score, it clearly indicates to lenders that you are risky to pay the loan.
Cash Flow – The cash flow means inflows and outflows of cash, it shows the activity of the organisation. Lenders always have consistency checks in monthly turnover. This cash flow helps in getting business loans at low interest-rate.
Repayment History – Your repayment track record matters a lot. Even a single default payment is a significant drawback to the borrower. The best way to ensure a high payment record is to make all payments on time.