Frequently Asked Questions
Why should I take a business loan?
Whether your business is at an initial stage or in the growth phase, additional finance can help you keep up the momentum. You can avail a business loan from Bajaj Finserv for your short or long term financial needs, to avoid any type of working capital shortfall.
Can the credit limit for a business loan be increased?
Yes, it is possible. This is subject to the eligibility criteria at the time of your request, and may be done at the sole discretion of Bajaj Finserv. You may submit a request letter to us, and if requested, fresh documents for the enhanced amount application.
How does a line of credit work?
Line of Credit is a unique credit facility given to our loan applicants, wherein you are approved for certain limit of credit/ loan, for a said duration. The monthly instalment for Line of Credit will consist only of the interest amount and will not have a principal component on a monthly basis. The principal amount of loan is to be repaid at the end of the tenure of the facility.
You can deposit the funds when in access and withdraw fund when required in business, and you will be charged interest only on the amount utilized by you. The limit may drop along the tenor (dropline) or remain constant throughout the tenor, giving you maximum availability of funds throughout the tenor.
How do I calculate the interest on the line of credit?
It’s pretty simple. Here is a formula you can use: Interest= (Amount Used * Rate of Interest)/360* Number of days’ funds used
What is the difference between Line of Credit and a Term Loan?
Term Loan : Customer avails loan and repays in equated instalments normally option to prepay with surplus funds, but no withdrawal options. Repayment of interest and principal every month.
Line of Credit : Customer avails loan and uses the same as a FIXED credit line with renewal option every year. Option to prepay with surplus funds as well as withdraw within the available limit Repayment of interest only every month, applicable on the utilized amount.
What is the cash flow benefit on Line of Credit?
Following table explains the cash flow benefit on a sample loan of 20 lacs.