The business loans interest rates offered by banks and non-banking financial companies (NBFCs) usually start from 9% p.a. Note that the interest rates offered on business loans depend on several factors like the loan applicant’s credit scores, nature of business, business income, nature of collateral/security, etc. As the interest rates may vary from one business loan lender to another, loan applicants should check and compare the interest rates offered by multiple lenders before applying for a business loan.
Government schemes - like MSME loans with subsidized rates
Current Business Loan Interest Rates in India in 2025
Banks typically offer the lowest rates but have stricter eligibility criteria. Here are the latest rates from major banks in 2025:
Banks / NBFCs (Click on Bank Name) | Interest Rate |
10.75% p.a. onwards | |
1% per month onwards | |
8% – 26% p.a. | |
10.75% – 25% p.a. | |
10.50% p.a. onwards | |
1.50% per month onwards | |
16% – 26% p.a. | |
12% – 27% p.a. | |
Mcapital | 2% per month onwards |
15% – 40% p.a. | |
12% p.a. onwards | |
9% – 36% p.a. |
Factors Affecting Business Loan Interest Rates
Your final interest rate depends on multiple factors:Â
- Credit Score – A CIBIL score of 700+ helps secure lower rates.
- Loan Type – Secured loans (backed by collateral) have lower rates than unsecured loans.
- Business Revenue & Age – Established businesses with strong cash flow get better rates.
- Loan Tenure – Shorter-term loans often have lower rates but higher EMIs.
- Lender Type – Banks offer lower rates than NBFCs but have stricter eligibility.
How to Get the Lowest Business Loan Interest Rate
- Improve Your Credit Score – Clear existing debts and maintain a score above 750.Â
- Compare Multiple Lenders – Use online marketplaces like apnabusinessbadhao.com.Â
- Opt for Secured Loans – Offering collateral (property, equipment) reduces risk for lenders.Â
- Negotiate with Banks – Long-term banking relationships can help in bargaining.Â
- Consider Government Schemes – MSME loans start at 8.25% p.a.under priority sector lending .Â
Emerging Trends in 2025
- Co-Lending by Banks & NBFCs – RBI’s new rules allow blended rates, reducing NBFC loan costs by 2-3%.Â
- Digital Lending Growth – Fintech lenders offer faster approvals but at higher APRs (up to 99% for merchant cash advances)
ConclusionÂ
Business loan interest rates in 2025 range from 7.25% to 40%+ (online lenders), depending on lender type, credit profile, and loan security. Key takeaways:Â
- Banks offer the lowest rates but require strong financials.Â
- NBFCs provide quicker loans but at higher costs. Â
Before applying, compare rates, check eligibility, and improve creditworthiness to secure the best deal.
