Business loan interest rates from Bajaj Finance range from 14% to 23% per annum. The exact rate depends on your credit score, business vintage, financials, and the loan variant you choose. But interest is only part of the total cost — processing fees, prepayment charges, penal charges, and facility fees all affect what you actually pay. This page covers the complete fee schedule, a worked EMI example, and what you can do to qualify for the lowest available rate.
Business loan interest rates and applicable charges
| Type of fee | Applicable charges |
| Rate of interest | Rate of interest per annum is in the range of 14% - 23% For Emergency Credit Line Guarantee Scheme (ECLGS) 5.0: 8.50% p.a. to 13% (RBI Repo Rate/BFRR + Spread). Interest rate chargeable for ECLGS is capped at 13%. |
| Processing fees | Up to 4.72% of the loan amount (inclusive of applicable taxes) |
| Bounce charges | Rs. 1500/- per bounce. |
| Flexi Facility Charge | Term Loan – Not applicable Flexi Loan – Up to Rs 999/- to Rs 16,999/- (Inclusive of applicable taxes) will be deducted upfront from loan amount. |
| Penal charge | Delay in payment of instalment(s) shall attract Penal Charge of 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount. |
| Prepayment charges | Full Pre-Payment |
| Stamp duty | Payable as per state laws and deducted upfront from loan amount |
| Annual maintenance charges | Term Loan: Not applicable |
Credit Guarantee Scheme Fee | Credit Guarantee Fund for Micro Units (CGFMU): Credit Guarantee Scheme fee - Up to 1.18% p.a. (pro rated daily till 31st March) (inclusive of all applicable taxes) of loan amount. |
Credit Guarantee Scheme Renewal Fee | Credit Guarantee Fund for Micro Units (CGFMU): |
Note: For loans under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, only Stamp Duty, Penal Charge, and Bounce Charges are applicable.
What is a Business Loan Interest rate?
Business loan interest rate refers to the percentage of the loan amount that a lender charges as a cost for lending money to a borrower. This rate essentially represents the price of borrowing and is commonly expressed as an annual percentage rate (APR). The interest rate plays a crucial role in determining the total cost of the loan over time. Several factors influence the final rate a business may receive, including the type of loan being applied for, the total loan amount, the repayment term, the creditworthiness of the borrower, and the purpose for which the funds will be used. Additionally, market conditions and the lender’s policies can cause the rate to vary. Understanding how the business loan interest rate is calculated and what affects it is essential for making informed financial decisions and comparing financing options effectively.
How to calculate business loan interest rate?
Bajaj Finance business loans use the reducing-balance method, where interest is charged on the outstanding principal each month. As you repay, your interest component falls and your principal component rises.
Formula
EMI = P × r × (1 + r)^n ÷ [(1 + r)^n − 1]
- P = Principal loan amount
- r = Monthly interest rate (annual rate ÷ 12)
- n = Tenure in months
Worked Example
Loan of ₹10 lakh at 14% p.a. for 5 years:
- Monthly rate = 14 ÷ 12 = 1.1667%
- Tenure = 60 months
- EMI = Rs. 23,268
- Total repayment = Rs. 13.96 lakh
- Total interest cost = Rs. 3.96 lakh
EMI Comparison — Rs. 10 Lakh Loan
Rate (p.a.) | EMI — 3 Years | EMI — 5 Years | Total Interest (5 Years) |
14% | Rs. 34,178 | Rs. 23,268 | Rs. 3.96 lakh |
18% | Rs. 36,157 | Rs. 25,393 | Rs. 5.24 lakh |
23% | Rs. 38,708 | Rs. 28,191 | Rs. 6.91 lakh |
A 9 percentage point difference in rate adds nearly Rs. 3 lakh to your total interest cost over five years on a Rs. 10 lakh loan.
Figures are illustrative, based on reducing balance, and rounded to the nearest rupee. Actual EMI depends on your sanctioned rate, tenure, and disbursal date. Use the EMI calculator for exact numbers.
Types of business loan interest rates
In India, banks and other lenders offer two main types of interest rates on business loans: fixed and floating.
- Fixed Business Loan Interest Rate:
With a fixed interest rate, the rate stays the same for the full loan period. This means your monthly EMI (Equated Monthly Instalment) will also remain the same until the loan is fully repaid. - Floating Business Loan Interest Rate:
With a floating interest rate, the rate can change from time to time. It depends on the Repo-Linked Lending Rate (RLLR), which is set by the Reserve Bank of India (RBI). If the RLLR changes, your interest rate and EMI may also increase or decrease.
Factors that affect Business Loan Interest rates
- Credit score — a CIBIL score of 650 or higher is required to apply; the higher the score, the closer your offer is likely to sit to the lower end of the 14%-23% range
- Business vintage — the business must have been running for at least 3 years; longer, stabler vintage supports a better rate
- Business income and financials — turnover, profitability and existing liabilities determine assessed repayment capacity
- Loan amount and tenure — the amount borrowed and the repayment period both feed the pricing model
- Loan variant — Term Loan, Flexi Term (Dropline) Loan and Flexi Hybrid Term Loan carry different charge structures (see the fee table), which affects the all-in cost
- Repayment track record — a clean history on past and existing loans signals lower risk and earns sharper pricing
Tips to Get a Business Loan at the Lowest Interest Rate
- Keep a strong credit score: Aim for a credit score 650 or higher. A high score shows that you manage credit responsibly. Make sure to pay EMIs and credit card bills on time to maintain a good credit history.
- Choose a shorter tenure: Shorter repayment periods reduce lender risk. If your cash flow supports it, a 24–36 month tenure will attract a better rate than a 60–96 month one.
- Show clean, stable business financials: Submit last 2 years' ITR, audited financials, and bank statements showing consistent turnover and profitability. Lenders price risk — a strong financial profile directly improves your offer.
- Maintaining a business vintage of 3+ years: Bajaj Finance requires a minimum 3-year-old business. Longer, stable vintage signals lower default risk and supports better pricing.
- Pick the right loan variant: Term Loan suits borrowers who want fixed EMIs and plan to prepay. Flexi Term and Flexi Hybrid suit those needing drawdown flexibility — but carry annual maintenance charges that add to total cost. Choose based on all-in cost, not just headline rate.
- Check your pre-approved offer first: Existing Bajaj Finance customers with a clean repayment record are often eligible for pre-approved offers at the lower end of the rate range with minimal documentation.
How does Bajaj Finance decide the Business Loan Interest Rate?
Bajaj Finance decides the business loan interest rate after reviewing your eligibility and overall financial profile.
- Credit score:
Your CIBIL score plays an important role. To apply, you must have a score of 650 or higher. A higher score shows good repayment history and may help you get a better interest rate within the range of 14% to 23% per annum. - Business vintage and profile:
Your business must be running for at least 3 years. Bajaj Finance reviews your business stability, financial documents, and proof of ownership before deciding the loan terms. - Loan amount and type:
The interest rate may vary depending on the loan amount you choose and whether you opt for a Term Loan, Flexi Term (Dropline) Loan, or Flexi Hybrid Term Loan. Different loan types may also have different charges, such as Flexi facility fees or annual maintenance charges. - Loan tenure:
The repayment period you select can also influence your overall cost. Longer tenures reduce your EMI amount but may increase the total interest paid over time. - Unsecured nature of loan:
Bajaj Finance business loans are unsecured, which means you do not need to provide collateral. Since no security is required, the interest rate is mainly based on your credit profile and business strength. - Other charges:
Apart from interest, you should also consider processing fees (up to 4.72% of the loan amount), bounce charges, penal charges for delayed payments, prepayment charges, stamp duty, and applicable Flexi or maintenance charges. - External factors:
Interest rates may also be influenced by wider economic conditions and policies set by the Reserve Bank of India (RBI), as these can impact overall lending rates in the market.
How to apply for a business loan
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Frequently asked questions
The processing fee for a Bajaj Finance Business Loan may go up to 4.72% (inclusive of applicable taxes).
Up to 4.72% (inclusive of applicable taxes) on the part-prepayment amount will be charged in case of a term loan. However, there are no part-prepayment charges if you opt for the Flexi Term Loan or Flexi Hybrid Term Loan.
Bounce charge is the fee incurred in case of a missed EMI payment. Bajaj Finance charges Rs. 1,500 per bounce, for every EMI missed.
You can get a Bajaj Finance Business Loan at a competitive interest rate between 14% to 23% p.a.
The foreclosure charge that you pay depends on the loan variant you choose. It is:
- Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount as on the date of full pre-payment.
- Flexi Term (Dropline) Loan: Up to 4.72% (Inclusive of applicable taxes)on the outstanding loan amount As On The Date Of Full Prepayment.
- Flexi Hybrid Term Loan: Up to 4.72% (Inclusive of applicable taxes) on the outstanding loan amount As On The Date Of Full Prepayment.
Use our free business loan EMI calculator to figure out how much interest you will have to pay on your loan. To see the interest charged, simply move the sliders to your preferred loan amount and tenure.
Your interest rate depends on how well you meet the eligibility criteria for the loan. Typically, it reflects the following factors:
- Your CIBIL Score
- Your business’s financials
- How long your business has been active
Ensure that you meet all the eligibility criteria in order to get the best deal on your business loan. The more profitable and longer-running your business, the lower your rate of interest. You must also ensure that your business has a minimum CIBIL Score of 650. The higher your CIBIL Score, the better your chances of securing a low-interest business loan.
A good rate of interest for a business loan in India typically ranges between 8% and 15% per annum, depending on factors like the borrower’s credit score, business vintage, loan amount, and collateral. Rates may vary between banks and NBFCs, with government-backed schemes often offering lower interest rates.
A fixed interest rate remains unchanged throughout the entire loan tenure, meaning your EMI stays the same regardless of changes in the Reserve Bank of India (RBI) repo rate. A floating interest rate, on the other hand, is linked to the RLLR (Repo-Linked Lending Rate) and varies in line with changes in RBI policy rates.
Unsecured business loans from Bajaj Finance are offered at a fixed interest rate, ensuring complete predictability of your EMI and helping you manage your finances with greater certainty.
