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Added on 07 June 2022

Know what can affect your Hero Fincorp Business Loan Interest Rate

Different factors affect the Hero Fincorp Business Loan Interest Rate and you should take them into account while applying for a loan.

At some stage or during different times, you may require a business loan and it can be irrespective of whether you own a small, medium, or large business. Whether you apply for a secured or unsecured loan from Hero Fincorp, there are certain factors that would influence the interest rate. Read on to know what can affect the Hero Fincorp Business Loan Interest Rate.

There are various things that affect the interest rate of a business loan and it includes the following:

· Personal and business credit score

Your personal credit score like your CIBIL score as well as your business credit score has a role in deciding whether your business is eligible for receiving a loan and at what interest rate. If the credit score is high, you can expect a lower interest rate on the loan or can negotiate for a lower rate. Your personal credit score takes into account your earlier loan history, your loan repayment history, missed instalments, etc. If your credit score is low, you may face a high-interest rate.

· How old is your business

Lenders usually associate new businesses with more risks while issuing loans. They consider vintage businesses that are already operating for a few years as a safer option. So, for a new business, you may expect a loan offer with higher interest rates.

· Business type

There are certain businesses like hospitality firms, travel agencies, etc, that the lenders consider being more risky than others. So, they may hike the interest rate if you own these categories of businesses.

· Loan term

The loan term influences the Hero Fincorp Business Loan Interest Rate. For a long term, the interest rate reduces as it is spread over a longer duration.

· Collateral or security

If you are applying for a secured loan and keeping collateral or security with your lender, you can expect a lower interest rate on the loan. This is because, in case you fail to pay back, the lender can claim ownership of your property or asset that you have kept as collateral.

· Loan category

There are certain loans, specifically for small businesses, that charge low-interest rates. A low-interest rate is advantageous as you can save funds for the future and also repay back the loan faster.

· No Default on your past or ongoing EMIs

You have to pay the EMI (Equated Monthly instalment) every month during loan repayment. Try to pay the EMIs within the timeline. Take care not to miss any instalment and face penalty as this can affect your chances of obtaining loans at lower interest rates.

· The financial condition of your business

A profitable business has a higher chance of supporting you to get a lower interest rate on the loan. Lenders thoroughly check the financial position of a company or business when they process loan applications.

Different factors affect the Hero Fincorp Business Loan Interest Rate and you should take them into account while applying for a loan. Proper steps can help you to save on the interest payment and ultimately on the EMI.