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A business loan in India from a scheduled bank is almost always priced off a published benchmark — the External Benchmark Lending Rate (EBLR, linked to the RBI repo rate) for newer loans, or the older MCLR. That means the headline rate you are quoted is the benchmark plus a spread the bank sets for your risk, tenure and collateral.
Because the benchmark is public and the same for every borrower, the honest comparison is the EBLR/MCLR ladder below — the floor each bank lends off — not the marketing APR. Unsecured business loans and NBFC/fintech loans sit well above this floor (often 14–24%) because they fold the collateral gap into the spread.
The bank EBLR floor today
| Bank | EBLR |
|---|---|
| RBL Banklowest | 6.00% |
| ICICI Bank | 7.50% |
| Kotak Mahindra Bank | 7.60% |
| HDFC Bank | 7.75% |
| IndusInd Bank | 7.75% |
| Bank of Baroda | 7.90% |
| Canara Bank | 8.00% |
| Indian Overseas Bank | 8.10% |
| Punjab National Bank | 8.10% |
| State Bank of India | 8.15% |
| Central Bank of India | 8.25% |
| UCO Bank | 8.30% |
RBI repo 5.25%. EBLR is the repo-linked floor each bank lends off; your rate is this plus a spread for your profile. Indicative, refreshed daily — confirm with the bank.
Full ladder with MCLR tenors on the bank loan-rate page.
How a business loan is priced
- EBLR = RBI repo rate + the bank's spread. When the repo moves, EBLR-linked loans reprice within a quarter.
- MCLR-linked loans reprice on their reset date (typically 6–12 months), so they lag repo cuts and hikes.
- Your spread over the benchmark reflects credit score, vintage, turnover, collateral and the CGTMSE/MSME scheme used.
- Collateral-free MSME loans (under CGTMSE) trade a guarantee fee for the missing security — cheaper than unsecured, dearer than fully-secured.
Work the numbers for your own business.
Loan EMI calculator →Questions, answered
- What is the interest rate on a business loan in India?
- Secured business and MSME loans from banks are priced off the EBLR (repo-linked) or MCLR, so they move with the RBI repo rate — the ladder on this page shows each bank's floor. Unsecured business loans and NBFC loans price higher, commonly 14–24%, depending on credit profile, turnover and tenure.
- EBLR or MCLR — which is better for a business loan?
- EBLR (repo-linked) is more transparent and reprices faster, so you benefit quickly when the RBI cuts rates — but it also rises faster on hikes. MCLR lags by its reset cycle. Most new bank business loans are now on EBLR.
- Can I get a collateral-free business loan in India?
- Yes — under the CGTMSE scheme, banks lend to eligible micro and small enterprises without collateral up to scheme limits, backed by a credit guarantee. You pay a guarantee fee instead of pledging security, so the effective rate sits between fully-secured and unsecured.
- What decides my spread over the benchmark?
- Your credit score and bureau history, business vintage and turnover, the collateral offered, the loan tenure, and whether a government MSME scheme applies. A stronger profile means a thinner spread over the same EBLR/MCLR.
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