What is the interest rate on MSME loans?

What is the interest rate on MSME loans?

2 min read

Bajaj Finserv offers low-interest rates and nominal fees and charges on its MSME loans. This collateral-free loan comes with an attractive interest rate starting at 9.75% - 30% p.a. and a nominal processing fee of up to 3.54% of the Loan Amount (Inclusive of Applicable Taxes). Here is the list of fees and charges:

Type of fee Applicable charges
Rate of interest 9.75% - 30% per annum
Processing fees Up to 3.54% of the loan amount (inclusive of applicable taxes)
Bounce charge In case of default of repayment instrument, Rs. 1,500/- per bounce will be levied.
Document processing charges Up to Rs. 2,360/- (inclusive of applicable taxes)
Flexi Fee

Term Loan - Not applicable
Flexi Term Loan (Flexi Dropline) - Up to Rs. 999/- (inclusive of applicable taxes)
Flexi Variant (as applicable below) - A fee will be deducted upfront from the loan amount

  • Up to Rs. 5,999/- (inclusive of applicable taxes) for loan amount less than Rs. 10,00,000/-
  • Up to Rs. 7,999/- (inclusive of applicable taxes) for loan amount from Rs. 10,00,000/- to Rs. 14,99,999/-
  • Up to Rs. 12,999/- (inclusive of applicable taxes) for loan amount from Rs. 15,00,000/- to Rs. 24,99,999/-
  • Up to Rs. 15,999/- (inclusive of applicable taxes) for loan amount of Rs. 25,00,000/- and above

*Loan Amount includes approved loan amount, insurance premium, VAS charges, and documentation charges.
Penal interest Delay in payment of monthly instalment shall attract penal interest at the rate of 42% per annum applicable on the monthly instalment outstanding, from the respective due date until the date of receipt of monthly instalment.
Pre-payment charges

Full Pre-payment

  • 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 Loan (Flexi Dropline): Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.
  • Flexi Hybrid Loan: Up to 4.72% (inclusive of applicable taxes) of the total withdrawable amount as per the repayment schedule as on the date of full prepayment.

Part Pre-payment

  • Up to 4.72% (inclusive of applicable taxes) of the principal amount of Loan prepaid on the date of such part Pre-Payment
  • Not Applicable for Flexi Term Loan (Flexi Dropline) and Hybrid Flexi
Stamp duty (as per respective state)
 Payable as per state laws and deducted upfront from the loan amount.
Mandate rejection charges Rs. 450/- per month from the first month of due date for mandate rejected by customer's bank until the new mandate is registered
Broken Period Interest/ Pre-EMI Interest

Broken period interest/ pre-EMI interest shall mean the amount of interest on Loan for the number of day(s) which is(are) charged in two scenarios:
Scenario 1 – More than 30 days from the date of loan disbursal till the first EMI is charged:
In this scenario, broken period interest is recovered by the following methods:

  • For Term Loan: Deducted from the loan disbursement
  • For Flexi Term Loan: Added to the first instalment
  • For Flexi Hybrid Loan: Added to the first instalment

Scenario 2 – Less than 30 days from the date of loan disbursal till the first EMI is charged:
In this scenario, interest is charged only for the actual number of days since the loan was disbursed.
Annual maintenance charges

Term Loan – Not Applicable

Flexi Term Loan (Flexi Dropline): Up to 0.413% (inclusive of applicable taxes) of the total withdrawable amount (as per the repayment schedule) on the date of levy of such charges.

Flexi Hybrid Loan: Up to 1.18% (inclusive of applicable taxes) of the total withdrawable amount during initial tenure. Up to 0.295% (inclusive of applicable taxes) of total withdrawable Amount during subsequent tenure.
Switch Fees* Up to 1.18% of the loan amount (inclusive of applicable taxes)

*Switch Fee is applicable only in case of switch of loan. In switch cases, Processing Fees and Documentation Charges will not be applicable.

MSME loan EMI calculation

EMI stands for equated monthly instalment. It is a fixed monthly payment made by the borrower towards repayment of the loan. Monthly instalments comprise the principal amount and the accrued interest.

Bajaj Finserv offers a flexible repayment tenor of up to 96 months on MSME loans to ease the process of repayment. This long tenor lets you spread out your EMIs and make the credit facility affordable. You can also use the online EMI calculator to know the exact amount of your monthly EMIs and total payable interest in just a few minutes.

How to calculate MSME loan EMI

Manual calculation of monthly instalments can be time-consuming and might give you an erroneous result. In such a situation, the MSME loan EMI calculator can help you as it is simple to use and provides accurate results in a few minutes.

You can calculate your EMI by giving the following information:

  • Principal
  • Rate of interest
  • Tenor

This online calculator uses the following formula:

EMI=P*r* (1+r) ^n/ [ (1+r) ^ n-1)

Here, P stands for the principal or loan amount

R stands for the rate of interest

N stands for the tenor

With this online tool, you can also try different combinations of loan amount and tenor to arrive at an EMI that fits your repayment capacity.

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