Things to consider while renewing a business loan

You have taken a business loan for a few years and have been diligently repaying each installment.

As your business has grown, so have your funding needs. Should you renew your business loan or go for a new one? This is a question business loans borrower have on their minds.

Renewing a business loan makes a lot of sense. It gives you funds, and the process is much simpler.

Often, the terms of renewal are often attractive. Let us tell you the key things that you should consider while taking that business loan renewal decision.

Loan renewal basics

As you may be aware, takers of business loans are often eligible to renew their business loans. For many borrowers, the opportunity to renew comes when they reach the halfway point of their repayment tenure.

Such a renewal process helps borrowers pay off their existing business loan and cover new expenses.

So, usually, the renewal loan amount is 2x so that you can pay off your original loan and use the rest for business growth.

When applying for your first business loan, the chance of approval would depend on a whole host of factors.

As you become a business loan borrower, you gain experience and become a trusted customer, thus brightening your chances when you seek renewal.

To check the monthly repayment amount for your desired renewal loan amount, use a business loan EMI calculator.

It is always better to ask for more business loan amount because in business you never know when the next growth opportunity comes knocking at your door.

Better interest rate

The first factor that you should consider while renewing a business loan is the interest rate.

Ideally, it should be lower than the previous business loan. This is because you are a proven borrower of business loans with a good record of repayment.

When you look at an institution like Tata Capital, they aim to offer attractive deals for borrowers with an intent to renew a business loan.

To check if your renewed loan is cheaper or not, use a business loan EMI calculator and assess the repayments.

For the lender too, giving you an attractive business loan interest rate on a renewal is a convenient option since they wouldn’t need to wait until the end of your term to convince you for additional funding for your business’s needs.

Simpler application process

As you consider business loan renewal, pay attention to the application process.

Ideally, the application process should also be simpler than it was initially. This is especially true if you stay with the same business loans lender.

A lot of your information should be stored, and they will also have data on your repayment track-record, enabling them to take faster decisions.

A simpler and easier application process while renewing means that you as a borrower could have speedier access to funding, compared to if you had applied for an entirely fresh business loan.

If you have already taken a loan from a trusted lender like Tata Capital, look no further when you think about renewal.

Save precious time and energy as you renew your business loan and give your business the growth boost. Use financing to expand your operations without depleting your revenue.