Features and benefits of an Unsecured Business Loan
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Easy repayment options
This loan gives you the option to pick a comfortable tenor that ranges up to 96 months.
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Flexi facility
For added financial flexibility, you can opt for the Flexi loan facility. This allows you to reduce EMI outgo by up to 45%*.
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Personalised loan deal
To expedite loan processing and avail of special terms, check for a pre-approved loan offer by sharing basic details.
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Online loan management
Access key loan information such as loan statements and manage your EMIs digitally with the online customer portal.
Unsecured business loans have an attractive advantage over secured loans in that you do not have to provide collateral to avail of them. This means that taking an unsecured loan in India for business expenses helps safeguard your assets. In addition to this benefit, an unsecured business loan comes loaded with several attractive features.
Eligibility criteria for Unsecured Business Loan
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Age
24 to 80 years*
(* Age should be 80 years at the time of Loan Maturity)
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CIBIL score
685 or higher
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Work status
Self-employed
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Nationality
Indian
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Business vintage
At least 3 years
You will need the following documents to apply
- KYC documents
- Proof of business ownership
- Bank statements of the previous months
- Other financial documents
Unsecured Business Loan Interest Rate and Charges
We ensure 100% transparency with all fees and charges applicable to our loans. Refer to the following table for the interest rate and a breakup of a few fees you may have to pay.
| 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 charge | 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 Flexi Term Loan (Flexi Dropline) - Up to Rs. 999/- (inclusive of applicable taxes) Flexi Hybrid Term Loan (as applicable below) - Up to Rs. 6,499/- (inclusive of applicable taxes) for loan amount less than Rs. 1000000/-. Up to Rs. 8,999/- (inclusive of applicable taxes) for loan amount from Rs. 1000000/- to Rs. 1499999/-. Up to Rs. 13,999/- (inclusive of applicable taxes) for loan amount from Rs. 15,00,000/- to Rs. 24,99,999/- Up to Rs. 16,999/- (inclusive of applicable taxes) for loan amount of Rs. 25,00,000/- and above. *The above Flexi facility charges will be deducted upfront from the loan amount *Loan amount includes approved loan amount, insurance premium and VAS charges |
| Penal interest | Delay in payment of instalment(s) shall attract Penal Charge at the rate of 36% per annum per instalment from the respective due date until the date of receipt of the full instalment(s) amount. |
| Pre-payment charges | Full Pre-payment
Part Pre-payment
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| Stamp duty (as per respective state) |
Payable as per state laws and deducted upfront from the loan amount. |
| Annual maintenance charges | Term Loan – Not Applicable Flexi Term Loan (Flexi Dropline): Up to 0.413% (inclusive of applicable taxes) of the Dropline Limit (as per the repayment schedule) on the date of levy of such charges. Flexi Hybrid Term Loan: Up to 1.18% (inclusive of applicable taxes) of the Dropline Limit during Initial loan tenor. Up to 0.295% (inclusive of applicable taxes) of Dropline Limit during Subsequent loan tenor. |
| 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. |
Types Of Unsecured Business Loan
Term Loan:
A loan, either secured or unsecured, taken for a fixed period. You repay it in monthly instalments (EMIs) within the set time.
Working Capital Loan:
A loan to cover everyday business expenses. It is given based on your credit history and ability to repay.
Overdraft:
A credit limit given by the lender that you can use as needed. Interest is only charged on the amount you actually use, not the full limit.
Loans under Government Schemes:
The government offers many loan schemes for small businesses at lower interest rates. These include Mudra Loan (PMMY), Stand-up India, Start-up India Scheme, PMEGP, CGTMSE, SIDBI’s Loans in 59 Minutes, and more.
Merchant Cash Advance:
A loan based on the credit card sales your business makes. The loan amount depends on how many card payments you receive each month.
Micro Loans:
Small loans offered by Micro Finance Institutions (MFIs) to help with urgent cash needs. These loans usually range from Rs. 5,000 to Rs. 2 lakh or more, depending on the business.
Business Credit Cards:
Business owners can also get loans using their business credit cards. This is basically a credit limit from the lender to help with day-to-day business expenses.
Other Unsecured Loans:
These include personal loans, education loans, loans on credit cards, and similar types of loans.
How to Apply for Unsecured Business Loan
- 1 Click on ‘APPLY ONLINE’ to open the online application form
- 2 Enter your basic information and input the OTP sent to your mobile number
- 3 Fill in your personal and business information
- 4 Upload the bank statement for the last 6 months and submit your application
Our representative will call you once you’ve applied for loan processing assistance.
*Conditions Apply
**Document list is indicative
Difference between secured loans vs. unsecured loans
Secured business loan |
Unsecured business loan |
Collateral (security) is needed |
No collateral or security needed |
Interest rates are usually lower |
Interest rates are usually higher |
Available even if borrower has less credit history or low credit score |
Often needs a better credit score |
Lender can take your collateral if you don’t repay |
Lender must go to court to recover money if you don’t repay |
Borrowing limits are higher because loan is backed by collateral |
Borrowing limits may be lower as no collateral is provided |
May ask for a personal guarantee |
Usually asks for a personal guarantee |
May accept lower business income as qualification |
Often needs higher business income to qualify |
Frequently asked questions
Unsecured business loans are beneficial as they provide quick access to capital without requiring collateral, offering flexibility in usage, and helping businesses meet short-term financial needs without risking assets.
The maximum term for an unsecured business loan typically ranges from 1 to 5 years, depending on the lender and the borrower’s creditworthiness, with shorter terms commonly available for smaller loan amounts.
The maximum limit for an unsecured business loan varies by lender but generally ranges from ₹2 lakh to ₹80 lakh, with higher amounts possible for businesses with strong financials and credit histories.
An unsecured loan can be good for businesses needing fast, collateral-free financing. However, it may come with higher interest rates and shorter repayment terms compared to secured loans, depending on creditworthiness.
