Compare our best business loan rates, comparison rates and rate types. Our Business loan rates are competitive and come with flexible options.Apply now for transparent advice !!
|Bank||Interest Rate||Processing fee||Pre-payment Charges|
16% - 30%
up to 2.50% of loan amount + service tax
up to 5% of principal outstanding
18% - 24%
Youâre probably wondering, how do banks calculate interest rates?
Banks usually have a benchmark set based on which they decide their prime interest for the proposed loan. This benchmark rate is the base interest which is made available to the bankâs most creditworthy customers. These business loans may be secured or unsecured, and the bank decides whether to sanction your loan based on the profitability of the business, retail shop or factory.
As you may have heard, there are a couple of interest rate types, and although the general populace has time and again ignored these types, the lending institutions have amassed huge profits using these business loan interest rates. So, itâs in your best interest to understand this business loan interest rate comparison to salvage your hard-earned savings.
A few types of interest rates are nominal, real, annual, effective and so on.
Nominal Interest Rate: This is the simplest form of interest rate type. If a borrower has agreed on an 8% nominal interest rate, he will pay an exact interest of 8% on the sum borrowed.
Real Interest Rate: This is a bit complex as it takes into consideration the inflation rate. If the nominal interest rate is 6% and the inflation rate is 4%, then the real interest rate comes to about 2%.
Effective Interest Rate: This rate of interest increases with the compounding period, depends on whether the compounding period is done annually or semi-annually.
You should also take a look at the calculation method of these interest rate types. There are two types, flat rate interest calculation and reducing balance rate calculation.
Flat Interest Rate: In this type, a fixed sum on interest is expected to be paid on the full principal amount. In spite of the fact that with every EMI, the principal amount keeps reducing, you still pay the flat interest rate that was agreed upon.
Reducing Interest Rate: In this type, the interest rate keeps reducing with each EMI paid as the principal amount reduces every month. This interest rate is calculated every month based on the remaining principal amount to be paid to the bank.
While banks often lure you into a trap by not covering the details, and show you the glam and glitter of the loan, we at CreditNation compare business loan rates with complete transparency.
CreditNation provides all the options that favor our customers, and get them the best deal available based on their requirement.
By calculating various interest rates and choosing one that is most beneficial to you, we help you make an efficient and sound decision when it comes to acquiring a business loan.
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