An unsecured business loan is a type of financing that does not require you to pledge collateral or assets. These loans are usually approved based on factors like credit history, income, and business performance. The process is often quick and online, making it easier for entrepreneurs to access funds for working capital, expansion, or other business needs without the risk of losing personal or business property.
Unsecured business loan features and benefits
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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.
Unsecured business loan eligibility criteria and documents required
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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 Hybrid Term Loan: Up to 1.18 % (Inclusive of applicable taxes) of the Dropline Limit during Initial loan tenor. Up to 0.413% (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
Unsecured business loans are available in different forms to meet the unique needs of entrepreneurs across sectors.
MSME Loan: Specially designed for micro, small, and medium enterprises, these loans help in managing day-to-day expenses, buying machinery, or scaling operations.
Trade Finance: Offers funds to businesses involved in import or export, ensuring smooth transactions and timely payments to suppliers.
Startup Business Loan: Provides new entrepreneurs with financial support to kickstart operations, invest in infrastructure, and cover initial working capital needs.
Supply Chain Finance: Helps businesses manage cash flow by offering credit to suppliers or buyers within the supply chain, ensuring continuity of operations.
Shop Loan: Aimed at small shop owners, these loans can be used for renovation, purchasing inventory, or expanding the shop’s offerings.
GST Business Loan: Based on GST returns, these loans are offered to businesses with consistent sales records, making access to credit easier without heavy documentation.
Business Loan for Women: Tailored to support women entrepreneurs, offering funds to start or expand businesses with added benefits like lower interest rates in some cases.
Working Capital Loan for Women: Provides short-term funds to women-led businesses to cover daily operational expenses like salaries, rent, or raw material purchase.
Loan without Financials: Designed for businesses that lack detailed financial statements, these loans are provided based on alternate eligibility like bank statements or GST returns.
How to apply for unsecured business loan
- 1 Click on ‘CHECK ELIGIBILITY’ 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.
If a borrower fails to repay an unsecured business loan, the lender may impose penalties, report defaults to credit bureaus, and initiate legal action. This can affect both the credit score and future loan eligibility of the business.
Insurance is not mandatory for unsecured business loans. However, some lenders may recommend or offer insurance as an additional safeguard for borrowers.
