Term Loan: Get A Short Term Business Loan in India within 24 Hours
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Term Loan: Get A Short Term Business Loan in India within 24 Hours

Term Business Loans are the finance schemes granted to businesses with fixed repayment tenure. Depending on the length of the repayment schedule, it can be a short, medium, or long-term loan. These loans meet a business’s short, medium, or long-term capital requirements to support its expansion, development, and modernization. 

All banks and NBFCs in India are offering term business loans to businesses subject to meeting the eligibility criteria. The best part is that the interest paid on these loans qualifies for tax exemption and thus helps a company to optimize its cash flowApplicants can use the term loan calculator to calculate the interest payable on the term loan and, therefore, plan the repayment better. 

What are the different sorts of term loans available for businesses? 

Small and medium businesses avail significant advantages from business term loans as it is the cheapest and the most flexible way to finance their working capital needs. It starts with the short-term loan wherein the repayment term is restricted between 1 and 2 years. If the repayment term is between 2 and 5 years, it is a medium-term loan. Long-term loans feature repayment terms over five years. Short and medium-term loans are ideal for meeting working capital needs, while long-term loans are ideal for procuring fixed business assets. 

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Terms loans can be secured or unsecured. In the second case, the borrower must pledge collateral assets towards the loan. The best part about secured loans is that they attract lesser interest rates and thus accumulate more deficient liability on the borrower’s part. Investment certificates and fixed and moveable assets qualify as collateral for secured business loans. 

What are the advantages of term loans? 

The term loan is the most inexpensive form of business finance. Research suggests that businesses need to pay interest at the lowest rates on these loans, in addition to tax exemption for the interest paid. It deserves special mention that these loans are highly flexible, and the lender is ready to negotiate the loan terms with the borrower. Most importantly, borrowers can foreclose the loan at any time without paying any foreclosure penalty, which helps them to escape paying interest for the remaining term. As such, they can downsize the cost of borrowing further. 

Key points to remember before taking a term loan 

As nothing under the sun comes without some restrictions, term loans also have their downsides. Firstly, it compels the borrower a commitment to repaying the loan amount along with interest within the specific term. It will keep eating away a significant part of the revenue until the borrower completes the repayment. If the borrower fails to comply with the repayment schedule, it shatters their business and personal creditworthiness. It will block all the prospects of getting any credit products approved in the future. Poor creditworthiness will likely stop the business prospects as prospective clients will be sceptical about engaging their offerings. Thus, the business might suffer in developing new businesses. In the case of a listed company, poor creditworthiness downsizes the share price, adversely affecting its reputation and financial health. 

Getting a term loan is a minor deal if you meet the eligibility. The business must have completed a year and have its necessary business credentials, including income-proof documents. If the applicant meets the eligibility points and features a good credit score, the lender approves the application within the minimum time, disbursing the loan at its earliest. Now you can use the term loan calculator to calculate the interest rate on your term loan in India.

Bajaj Finserv is one of India’s largest and most reliable term loan providers, offering a plethora of loan products at competitive interest rates to business and individual applicants, meeting their flexible loan eligibility criteria. 

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