Multiple banks. Different interest rates. Call it a "conflict of interest".
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    Commercial Loans

    A commercial loan, as the name suggests, refers to a loan that is offered to a business by a financial institution. This type of loan can be utilised for commercial purposes. This loan is provided through a debt-based funding agreement between a business entity and a lender. Both banks and non-banking financial corporations (NBFCs) offer commercial loans to companies and firms. Commercial loans are not offered to individual loan applicants for personal reasons.

    These loans help corporations meet their financial expenses for their various activities. Some of the expenditures include working capital expenditures, operating expenses, etc. Commercial loans are sometimes known as business loans too. These loans are typically offered for a short tenure. The tenure can range from 1 month to 1 year depending on the company’s requirements.

    These commercial loans are very helpful to small businesses that may not have sufficient funds to take care of different financial requirements. Many small businesses may not be eligible to apply for regular loans due to eligibility criteria, high upfront fees and charges, and strict regulatory obstacles. Hence, small businesses have to rely on alternative debt products for financial assistance and these can be consumer credit, unsecured loans, commercial loans, a line of credit, term loans, etc.

    In India, one can choose from business loans and business installment loans provided by banks and NBFCs.

    Features of Commercial Loans

    • Commercial loans are provided to a business entity and not to individual consumers.
    • They can be utilised by organisations to handle financial expenses such as purchasing equipment, buying and installing machinery, purchasing inventory, buying office furniture, purchasing vehicles for company purpose, construction, renovation of office location(s), etc.
    • Commercial loans can be secured or unsecured in nature. If an organisation chooses a secured commercial loan, then they will have to provide a collateral or security to the lender. In this case, the interest rates will be lower as the level of risk is low for the lender. If a company wants to apply for an unsecured commercial loan, then the rate of interest will be slightly higher as the lender will face a higher level of risk since there is no security involved in this loan agreement. If you take a commercial vehicle or asset loan, this particular vehicle or asset will be hypothecated to your lender.
    • Commercial loans are provided for a short period. This can range from 30 days to 1 year. It is sometimes given for a longer tenure too. This will depend on the lender. When you apply for commercial equipment loans or commercial construction loans, you can choose a longer tenure for up to 4 or 5 years.
    • Commercial loans can cover revolving lines of credit, short-term debt, long-term debt, etc.
    • Commercial loans are offered at fixed interest rates or floating interest rates. If you have a fixed interest rate, your interest will remain fixed throughout the tenure. If you have a floating interest rate, your interest will fluctuate with changes in the market.
    • You can repay a commercial loan through post-dated cheques, Electronic Clearing Service (ECS), Standing Instruction (SI), etc.
    • Typically, when you make the last payment of your commercial loan, the asset that is hypothecated with your lender will now be in your name and you can revoke the lien of the lender on your company’s vehicle or asset.
    • Commercial loans also help companies in purchasing supplies, buying raw materials, funding production processes, handling payroll needs, etc.
    • Commercial loans can be taken for purchasing real estate properties too. These loans will be commercial mortgage loans that help a firm in purchasing commercial properties.
    • Commercial loans are sometimes provided to self-employed professionals or non-professionals so that they can purchase property or any other asset for their firm’s requirements. These individual loan applicants can be lawyers, doctors, engineers, architects, consultants, contractors, etc. and they will have to apply on behalf of their firm.
    • These loans can be utilised for expanding company operations too.

    Eligibility Criteria for Commercial Loans

    • Partnership firms, sole proprietorship firms, public limited companies, private limited companies, and self-employed professionals and non-professionals can apply for commercial loans or business loans in India.
    • The business entity that needs a commercial loan should have a good turnover. The turnover requirement will differ from lender to lender. You can check with your lender.
    • Each loan applicant should meet the minimum annual income requirement as a firm.
    • The firm should have been making profits for a certain period, which will be specified by the lender.
    • The company interested in a commercial loan should have been in business for a certain period, which will be mentioned by the lender.
    • The minimum age criterion for an individual who is applying on behalf of his or her firm is typically 21. The maximum age requirement is 65 years. This can change from lender to lender.

    Documentation Process for Commercial Loans

    While applying for a commercial loan, a firm or individual will have to compulsorily submit certain documents to the lender and they include:

    • PAN card for firms, companies, and individuals
    • VAT or GST statements for a certain period
    • Balance sheet
    • Income tax returns for a certain period
    • Profit and Loss statement for a certain period
    • Bank statements for a certain period
    • Proof of continuation in business. The company can submit trade license, sales tax certificate, Income Tax Returns, establishment certificate, etc.
    • Certified Copy of Partnership Deed
    • Sole Proprietorship Declaration
    • Board resolution
    • Certified true copy of Memorandum and Articles of Association

    Fees and Charges for Commercial Loans

    While applying for a commercial loan, a company or a self-employed individual will have to pay certain fees and charges. Apart from paying the interest rate, the loan applicant may have to pay loan processing fee, amortisation fee, stamp duty, cheque swapping fee, legal or incidental charges, cheque bouncing charges, late payment charges, pre-payment charges, etc. The charges will be mentioned to you by your lender before you apply for the loan. You can view your commercial loan policy document for full information about the various fees and charges.

    As a company, a commercial loan is a great financial instrument for meeting the various financial requirements extensively. While applying for a commercial loan, the organisation should prove that it has a regular, good cash flow. This will help the lender be confident that the borrower can repay the loan installments in a timely manner. In some scenarios, lenders may ask the loan applicant to take insurance for assets that have been purchased with the loan, especially if the assets are of high value.

    Personal Loan Reviews

    • Kotak Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using with the personal loan from the Kotak BANK , there service is too good, they have charged me nominal rate of interest in this loan they have charged me up to 10.99% it is nominal, and even processing fee they have charged me was nominal they have charged me up to 1% . but they have taken stamp duty charges and credit appraisal charges as well,the loan amount they have given me was sufficient.
      Was this review helpful? 1
      , hyderabad
      Reviewed on Jan 21, 2019
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been using bank bazaar service for first time, and i came to know about bank bazaar service through on line as i was checking for some financial products and i have been downloaded mobile application it is easy to access.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 21, 2019
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 4.0/5 "Great!"
      I have been using bank bazaar service for first time,i came to know about bank bazaar service through on line, like i was seeing for good bank for apply a credit card for page was on top and i have been using bank bazaar website it was easy to access.
      Was this review helpful? 0
      , ghaziabad
      Reviewed on Jan 21, 2019
    • Kotak Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been holding my personal loan with KOTAK MAHINDRA BANK, the loan amount they have given me was not sufficient they have given me up to 2,90,000 as loan amount i have expected up to 3,00,000 as loan amount, and the rate of interest they have charged me was high like while applying they have said that they will be charging 15.75% but they have charged up to 16.75% and they have taken me processing fee up to 10,000 including gst it was bit high, there was 10-12 days delay in getting loan amount.
      Was this review helpful? 0
      , ghaziabad
      Reviewed on Jan 21, 2019
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 4.5/5 "Excellent!"
      I have been using bank bazaar service for first time, i came to know about bank bazaar service through on line, and i was searching for some credit cards, and i have been using website of bank bazaar it is easy to access, and there customer support team is very good.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 20, 2019
    • Kotak Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been holding my personal loan with KOTAK MAHINDRA BANK, the loan amount they have given me was sufficient , they have charged me rate of interest was nominal they have charged me up to 15.99% was nominal, and the processing fee they have charged me was nominal there was no delay in loan , bu there was many deduction they have given me up to 8,000-9,000 it high , and emi option on 10 jan it got auto debited but in 11-12 jan again it came to my account stating that it got bounce, i need to check with the customer.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 20, 2019
    • Bank Bazaar Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I Came to know about bank bazaar service through on line, i have been applied for first time for my personal loan,the bank bazaar service was excellent,and i have been using website,it is easy to access,there was no technical issue i have been faced yet, overall service was excellent.
      Was this review helpful? 0
      , nasik
      Reviewed on Jan 20, 2019
    • HDFC Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I took my personal loan with HDFC bank recently,the loan amount they have charged me was sufficient,it is enough for me ,and the rate of interest they have charged me nominal,i donâ??t know exactly how they have charged me it should be in between of 10-13% ,which is nominal compare to market rate,and the processing fee they have charged me was nominal,i got loan on time.
      Was this review helpful? 0
      , nasik
      Reviewed on Jan 20, 2019
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      It has been quite a good experience i had with this loan and the process has went well in getting this loan. It was a pre approved loan and the loan amount has been sufficient, the interest rate with them has been on the higher end and the customer support support and the staffs has been good.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 20, 2019
    • Kotak Personal Loan
      "Average Service"
      0.5 2.0/5 "Expected more"
      It was not a good experience i had with this loan where the interest rate with them has been around 18% which was very high when compared with the market rate and the charges which they had made also has been very high. Their customer support response has also not been good.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 20, 2019
    • ICICI Bank Personal Loan
      "Not a good services"
      0.5 1.0/5 "Really Bad"
      I had taken the personal loan with ICICI bank. When i went for the pre-closure they have charged me a huge amount as a pre-closure charges and the same has not been informed at the time of taking the loan. Interest rates were very huge which is 15% and the processing fee was Rs. 1000. Actually i have to locate a particular branch for closing the loan and the closing option is not available in all the branches.
      Was this review helpful? 0
      , new delhi
      Reviewed on Jan 20, 2019
    • Capital First Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using with Capital first personal loan for long time, they have given me sufficient loan amount ,and the rate of interest they have charged me is nominal they have charged me up to 11.9% approx they take up to 12% as interest,the processing fee they have charged me was nominal,there overall service was good.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 20, 2019
    • Tata capital Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using TATA CAPITAL bank personal loan for long time,the loan amount which they have given me was sufficient,the rate of interest they have charged me where high,they have charged me up to 14%, it high compare to other bank,and the processing fee they charged me was nominal,till now no issue with them,overall service is good.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 20, 2019
    • ICICI Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using with ICICI bank personal loan for long time, they have given me sufficient loan amount ,and the rate of interest they have charged me is nominal they have charged me up to 11.9% approx they take up to 12% as interest,the processing fee they have charged me was nominal,there overall service was good.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 20, 2019
    • HDFC Bank Personal Loan
      "Good service"
      0.5 4.0/5 "Great!"
      I have been using HDFC bank personal loan for long time,the loan amount which they have given me was sufficient,the rate of interest they have charged me where high,they have charged me up to 14%, it high compare to other bank,and the processing fee they charged me was nominal,till now no issue with them,overall service is good.
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 20, 2019
    • Punjab National Bank Personal Loan
      "Excellent service"
      0.5 5.0/5 "Blown Away!"
      I have been holding personal loan with punjab national bank,andthe loan amount they have given me was sufficient, there process was quick ,and the loan amount i got with in one week,and the rate of interest they have charged me was nominal,they have charged me up to 10.25% previously but after negotiating they have charged me 10.10% ,the processing fee they have charged me nominal,there executive had clearly explained .
      Was this review helpful? 0
      , kolkata
      Reviewed on Jan 20, 2019
    • Bank Bazaar Personal Loan
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      I got a good experience with bank bazaar. This is the first time, I have applied the personal loan and just Googled went through the link. I have used the website and representative contacted immediate. They have explained me process and hassle free. I have not checked with the credit score.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 19, 2019
    • IndusInd Bank Personal Loan
      "Satisfactory"
      0.5 5.0/5 "Blown Away!"
      The rate of interest and charges are reasonable. The loan duration is 5 years. The documents are collected by the executive. I have not checked the term and conditions for foreclosure. The loan process was immediate. The customer service and response was fine in Induslnd Bank.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 19, 2019
    • ICICI Bank Personal Loan
      "High Interest rates"
      0.5 4.0/5 "Great!"
      I have taken a personal loan with ICICI Bank and the loan is still running. The rate of interest is bit high and it is around 11.45%. At the time i applied for a credit card my application was processed quick. If the rate of interest come down it will be good. The Tenure period is 5 years.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Jan 19, 2019
    • ICICI Bank Personal Loan
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      Still am running the personal loan, They did not reveal the charges and executive called me informed about I will receive some loan amount but got lesser than that. Though I called the customer service there was no proper response. The loan duration is 5 years and monthly EMI is 14K through ECS. I am a salary account holder of ICICI Bank and did not get any much benefits of this account.
      Was this review helpful? 0
      , bangalore
      Reviewed on Jan 19, 2019
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