Latest Business Loan Interest Rates
Securing a Business Loan, which has significantly higher EMI and shorter Tenure, is a decision which should be taken with considerable deliberation. The amount to be borrowed, and the EMI to be paid, should come out of the cash-flows which are not speculated but confirmed, as it can impact the business cash-flows or come out of an amount that is going to be used for an expense, creating an imbalance in the cash-flows.
While one can still plan the amount and EMI repayment capability – but how does one know that they are getting the Best Interest Rate?
How a Business Owner can know if he is getting the best possible Interest rate.
For every loan being taken, there are two perspectives: of the Borrower and the Lender. And the end objective is the same: to be able to repay without hurting the cash–flows. Now, as a Borrower it is important to understand his capacity to pay,, and which lender can offer him the desired loan amount and the lowest interest rate. Here’s a guide on understanding these aspects in detail:
Why Even Small Differences in Interest Rates Matter
For high value loans, the impact of interest rate becomes very important. Lower rate means lesser EMIs and lesser money spent on interest throughout the loan duration.
Example: A 1% difference on a 2 crore loan will cost over 5.5 lakhs in interest payment savings over 5 years.
The upper limit of most lenders falls anywhere between 12% per annum to 25% p.a. depending on your business’s financial health and credit history. We strive to help you secure the lower end of that spectrum.
Table of Contents
Compare Business Loan Interest Rates from Leading Lenders (August 2025)
Interest rates in India are set based on risk factors by lenders. Below are some of the major banks and NBFCs along with their estimated rates for comparison.
|
Bank / NBFC |
Starting Interest Rate (p.a.) |
|
HDFC Bank |
12.00% |
|
Axis Bank |
14.00% |
|
SCB |
14.00% |
|
IDFC FIRST Bank |
14.75% |
|
Deutsche Bank |
15.00% |
|
ICICI Bank |
16.00% |
|
Bajaj Finserv |
16.00% |
|
Aditya Birla Finance |
16.00% |
|
Tata Capital |
16.50% |
|
Godrej Capital |
17.00% |
|
Indifi |
18.00% |
|
LendingKart |
19.00% |
Note: These rates are indicative and subject to change based on the RBI’s policies, market conditions, and your individual business profile. The final rate is always at the lender’s discretion.
Business Loan EMI Calculator
Use our Business Loan EMI Calculator to see your estimated monthly payments, total interest, and amortization schedule. Adjust the loan amount, interest rate, and tenure to find a plan that fits your budget perfectly.
Eligibility Criteria for a Business Loan
Below mentioned are the factors that makes an entity eligible for business loan:
| Particulars | Requirements |
|---|---|
| Age (It may vary across lenders) | 21 years at the time of loan application. 65 years at the time of loan maturity. |
| Minimum Business Vintage | 3 years (Some lenders might also take into account up to 2 years of business history). |
| Minimum Business Turnover | Rs 50 Lakhs |
| Credit Score | 700 or above |
| Eligible Entities | MSMEs, Proprietors, Limited Liability Partnership firms, Private Limited Companies, Public Limited Companies, Self-employed individuals or professionals, individual corporations, etc. |
Documents required for a Business Loan
|
Particulars |
Requirements |
|
KYC Documents Of Applicants |
|
|
Business-Related Documents |
|
|
Financial Documents |
|
|
Other Important Documents |
|
Other Important Fees and Charges
|
Particulars |
Standard Charges |
|
Processing Fees |
Up to 2% of the loan amount + GST |
|
Prepayment/Foreclosure Charges |
Up to 4% of the outstanding principal amount |
5 Actionable Steps to Get a Lower Business Loan Interest Rate
Use these active strategies instead of accepting the first offer to achieve a better interest rate.
- Improve your credit score: This is the best negotiation tool. A score above 700 makes you a safe bet for lenders, and can often access 1-2% lower than standard offers.
- Provide collateral: If you can, the risk of lending is significantly reduced when property, machinery, or other assets are pledged as collateral. These loans tend to carry much lower interest rates than those made without any form of security.
- Use government programs: Subsidized interest rate schemes for MSME’s are offered by the Indian Government. Look into the CGTMSE Scheme for collateral-free loans or other similar programs.
- Draft a detailed business plan: With large loans, sophisticated business plans detailing revenue projections and repayment timelines reduces perceived risk, thus improving loan terms.
- Compare Aggressively: Don’t limit yourself to one bank. Platforms like OneNDF enable competing offers from multiple lenders. Possessing another offer increases leverage during negotiations which is always beneficial.
Fixed vs. Floating Interest Rates: Which Is Right for Your Business?
This decision affects the predictability of your EMIs.
|
Feature |
Fixed Interest Rate |
Floating Interest Rate |
|
How it Works |
The rate is locked for the entire loan tenure. |
The rate is linked to a benchmark (like the RBI’s Repo Rate) and changes with the market. |
|
Pros |
Predictable EMIs, easy budgeting, protection against rate hikes. |
Starts lower than fixed rates, you benefit if market rates fall. |
|
Cons |
Higher starting rate, you won’t benefit if market rates drop. |
EMIs can increase if market rates rise, creating budget uncertainty. |
|
Best For |
Risk-averse businesses require stable, predictable repayments. |
Businesses with a higher risk appetite who expect a drop in market rates. |
Current Outlook (August 2025): Your choice is guided by your risk profile with the RBI Repo Rate stabilizing. For future guidance, check the latest RBI press releases.
Why Choose OneNDF for Business Loans up to ₹2 Cr?
Understanding high-value business loans can be difficult and time-consuming. OneNDF simplifies this process by acting as your expert financial partner.
- Lowest Interest Rate Guarantee: We work with over 120 lenders to get you the best possible rates—starting from just 12% per year.
- One Application, Many Offers: Fill one form, and get offers from top banks like HDFC, ICICI, Axis, and trusted NBFCs—no need to apply everywhere.
- Expert Guidance: Our loan experts will guide you—from choosing the right loan to talking to banks and getting you the best deal.
- Fully Digital Process: No paperwork. No running around. Apply, track, and get your loan online—fast and easy.
FAQs on Business Loan Interest Rates
Q.1 What’s the latest rate of interest for a business loan?
Currently, the rates of interest range from 12%-25% p.a. These are based on your business profile, credit score, turnover, and the specific policies of the lender.
Q.2 Can I get a 50 lakh loan for business?
Absolutely. If your business meets certain benchmarks like minimum turnover of ₹50 lakh, a business vintage of 2–3 years, along with a decent credit score (700+).
Q.3 How can I get a low-interest rate on a business loan?
Keep a high credit score (700+), give property/machinery as security, and compare offers with OneNDF.
Q.4 Is collateral required to secure a business loan with low interest rates?
Not always. But if you do, your interest rate can be lower.
Q.5 Which lender has the lowest or best interest rates on business loans?
As of Aug 2025, HDFC has the lowest starting rate at 12% p.a. Others like Axis, IDFC, and SCB offer 14–15% p.a.
Disclaimer: The information provided in this article is for educational purposes only. Interest rates and lender policies are subject to change without notice. Please consult with a qualified financial advisor for personalized advice tailored to your specific situation.
