What is the interest rate on MSME loans?

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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 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

  • Term Loan: Up to 4.72% (inclusive of applicable taxes) on the outstanding loan amount as on the date of full prepayment.
  • 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-prepayment

  • Up to 4.72% (inclusive of applicable taxes) of the principal amount of loan prepaid on the date of such part-prepayment.
  • Not applicable for Flexi Term Loan (Flexi Dropline) and Hybrid Flexi.
Stamp duty (as per respective state)
Payable as per respective state
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 loan tenure. Up to 0.413% (Inclusive of applicable taxes) of the Total Withdrawable Amount during Subsequent loan 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)

*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 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.

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Frequently asked questions

What is the impact of MSME loan interest rate on your EMI?

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.

Do MSME loan interest rates vary based on the type of business or industry?

Yes, MSME loan interest rates can vary depending on factors such as the borrower's creditworthiness, the loan amount, and prevailing market conditions.

What is the current MSME loan interest rate?

The current MSME loan interest rate varies depending on the lender, prevailing market conditions, and the borrower's credit profile.

What factors influence the interest rates on MSME loans?

Factors influencing MSME loan interest rates include the borrower's creditworthiness, loan amount, loan tenure, prevailing market conditions, and the lender's policies.

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