A business machinery loan is an unsecured loan that helps business owners, entrepreneurs, self-employed professionals, and other business entities gather funds to purchase new and more powerful machinery. Business ventures use this type of loan to enhance their manufacturing units’ overall productivity without affecting their working capital. Ultimately, it helps them attain their business goals and increase profits.
Furthermore, some small businesses apply for this loan to refurbish or modify their pre-owned machinery or equipment. This prevents them from spending money from working capital to repair or upgrade machinery.
If you are looking for a machinery loan and a worried about its interest rate and repayment terms, we’ve got good news for you. You can get a machinery business loan at lower interest rates without security or collateral. Plus, it is easy to pay with the monthly EMI payments. If you have an existing loan, you can check the availability of an overdraft facility in case you need some more funds. Read on to learn more about the interest rates, eligibility criteria, and repayment terms for machinery loans.
Interest Rate
Usually, the interest rate for machinery loans starts from 15% per annum. But, it can vary depending on certain factors like the credit score of the lender, the business plan, and the terms of the loan.
Eligibility Criteria
Check out the following eligibility criteria for machinery loans:
- The applicant’s age should be between 21 and 65 years at the time of loan maturity
- The business should be at least 2 years old
- The applicant’s credit score should be 650 or more
- There should be no default on the previous loan.
Machinery Loan Repayment Terms
Let’s look at the following repayment terms for a machinery loan:
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Tenure
The tenure for the machinery loan depends on how much time you need to pay back the whole borrowed amount with an interest rate. Lenders usually offer repayment tenure between 36 months and 10 years. The common notion is that the longer the tenure, the lower the amount of the EMI. However, you should be mindful before choosing a longer tenure because while the monthly EMI will be smaller, you end up paying a bigger repayment amount.
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Repayment
Regular and on-time repayment of the machinery loan through monthly EMIs is vital. This is necessary if you aim for a good credit score for future loan applications. Furthermore, missing or delaying a loan’s EMI repayment can be very frustrating as it comes with hefty penalties. Also, there remains a risk of becoming a loan defaulter in case you miss the loan’s repayment EMIs.
Machinery Loan Calculator
While ascertaining the loan amount, it is vital to use a machinery loan calculator. This helps you in knowing, easily and accurately, how much money you have to repay to the lender. All you must do is enter the loan amount, interest rate and repayment tenure to get an idea about monthly EMI instalments. Choose only those EMIs or loan amounts that you can comfortably pay back.
Before You Take Off
In a nutshell, a machinery loan is a special kind of business loan that you can take for buying, upgrading, or repairing new or pre-owned machinery. This loan ensures that financial constraints do not hinder your business growth. The online mode of Lendingkart has made the approval for machinery cash loans easy and convenient. You can avail of easy loan approval with minimal paperwork, lower interest rates, and without security or collateral. Furthermore, this is very easy to pay back the loan amount with monthly EMI instalments.
