What is the interest rate on MSME loans?
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 14 - 26 p.a. and a nominal processing fee of up to 4.72% of the Loan Amount (Inclusive of Applicable Taxes). Here is the list of fees and charges:
| Type of fee | Applicable charges |
| Rate of interest | 14 to 25% per annum |
| Processing fees | Up to 4.72% of the loan amount (inclusive of applicable taxes) |
| Bounce charges | Rs. 1,500 per bounce. “Bounce charges” shall mean charges for (i) dishonour of any payment instrument; or (ii) non-payment of instalment (s) on their respective due dates due to dishonour of payment mandate or non-registration of the payment mandate or any other reason. |
| Flexi Facility Charge | Term Loan - Not applicable |
| Penal Charge | Delay in payment of instalment(s) shall attract Penal Charge of Rs. 40 per day per instalment from the respective due date until the date of receipt of the full instalment(s) amount. |
| Prepayment charges | Full Pre-payment
Part-prepayment –
|
| Stamp duty (as per respective state) |
Payable as per state laws and deducted upfront from loan amount |
| Broken Period Interest/ Pre-EMI Interest | Method of recovery of "Broken Period Interest/Pre monthly instalment Interest" would be as follows: |
| Annual maintenance charges | Term Loan: Not applicable Flexi Term Loan (Flexi Dropline): Up to 0.413% (Inclusive of applicable taxes) Flexi Hybrid Loan: Up to 1.18% (Inclusive of applicable taxes) of the Total Withdrawable Amount during Initial loan tenure. Up to 0.413% (Inclusive of applicable taxes) of the Total Withdrawable Amount during Subsequent loan tenure. |
| Legal and incidental charges | Recovery of charges |
| Principal Holiday Facility Fees | Principal Holiday (as applicable below) - (Inclusive of applicable taxes) Up to Rs. 6499 (Inclusive of applicable taxes) for loan amount less than Rs. 10,00,000. Up to Rs. 8,999 (Inclusive of applicable taxes) for loan amount between Rs. 10,00,000 and 14,99,999. Up to Rs. 13,999 (Inclusive of applicable taxes) for loan amount between Rs. 15,00,000 and Rs. 24,99,999. Up to Rs. 16,999 (Inclusive of applicable taxes) for loan amount Rs. 25,00,000 and above. Note- The above principal holiday facility fees will be deducted upfront from loan amount. Loan amount includes approved loan amount, Insurance Premium and VAS Charges. |
- Increased investment limits: The thresholds for MSME investment and turnover will be raised by 2.5 times and 2 times, respectively
Types of enterprises and revised limits
Type of enterprise |
Revised investment limit |
Revised turnover limit |
Micro enterprises |
From Rs. 1 crore to Rs. 2.5 crore |
From Rs. 5 crore to Rs. 10 crore |
Small enterprises |
From Rs. 10 crore to Rs. 25 crore |
From Rs. 50 crore to Rs. 100 crore |
Medium enterprises |
From Rs. 50 crore to Rs. 125 crore |
From Rs. 250 crore to Rs. 500 crore |
Additional measures for MSMEs in budget 2025
- Micro enterprise credit cards: Customised credit cards with a Rs. 5 lakh limit will be offered to micro enterprises registered on the Udyam portal, with 10 lakh cards planned for issuance in the first year
- Fund of funds for startups: The Alternate Investment Funds (AIFs), with a Rs. 91,000 crore commitment, will be supplemented with a new Rs. 10,000 crore Fund of Funds to further expand its reach
- Support for first-time entrepreneurs: A new scheme will provide term loans of up to Rs. 2 crore over the next five years to 5 lakh first-time entrepreneurs, particularly women, SCs, and STs
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 Business 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.
Frequently asked questions
The interest rate on MSME (Micro, Small, and Medium Enterprises) loans directly impacts the Equated Monthly Installment (EMI) amount paid by borrowers. A lower interest rate reduces the EMI, making the loan more affordable and reducing the overall cost of borrowing. Conversely, a higher interest rate increases the EMI, potentially straining the borrower's finances and increasing the total repayment amount. Therefore, borrowers often seek competitive interest rates when availing of MSME loans to minimize the financial burden and manage their cash flow effectively, ultimately impacting the sustainability and growth potential of their businesses.
Yes, MSME loan interest rates can vary depending on factors such as the borrower's creditworthiness, the loan amount, and prevailing market conditions.
The current MSME loan interest rate varies depending on the lender, prevailing market conditions, and the borrower's credit profile.
Factors influencing MSME loan interest rates include the borrower's creditworthiness, loan amount, loan tenure, prevailing market conditions, and the lender's policies.
