Urban Money

Punjab National Bank Business Loan

Punjab National Bank
4.5

Punjab National Bank (PNB), one of India’s oldest public sector banks, provides business loans to startups, entrepreneurs, as well as self-employed professionals with the aim to support their businesses’ capital requirements or expand business operations. The business loan interest rate offered by PNB depends on the applicant’s profile and business requirements, along with the applicant’s financial history, CIBIL score, and loan repayment history, etc.

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Interest Rate

Processing Fee

Rating

Loan Amount/Tenure

Punjab National Bank Business Loan Interest Rate

Punjab National Bank

12.65%

1.8%

4.5

₹50K - ₹15L

Tenure(1 - 5 Years)

Details

Features and Benefits of Punjab National Bank Business Loan

Given below are some of the features and benefits of Punjab National Bank Business Loan:

  • You can check your eligibility instantly on the official website, and the loan amount is disbursed quickly in a matter of 3 to 4 days
  • If the loan amount is not sanctioned, the upfront fee or processing fee paid at the time of loan application will be refunded
  • Online loan applications for MSMEs get a 20% discount in terms of processing fee
  • Punjab National Bank business loans have flexible tenures ranging from 12 months to 60 months
  • There is a minimal documentation requirement to avail a Punjab National Bank business loan
  • You can transfer any existing business loan to Punjab National Bank to lower your monthly payments and save on interest
  • This loan does not require any collateral or guarantor for loan amounts up to Rs. 1 crore
  • Minimal prepayment charges
  • All loan amounts are covered under the umbrella of insurance in case of the death of the borrower. 
  • Zero hidden costs

Punjab National Bank Business Loan Overview

Punjab National Bank Business Loan is one of the most sought-after loan offerings for various different business entities owing to the high disbursal amount, the simplified application process, nominal interest rates, and flexible loan tenures. These loans have low processing times and competitive terms and are tailor-made to suit the needs of each borrower. These loans are offered for various purposes, including business expansion, working capital requirements, hiring staff, purchasing machinery, and purchasing commercial property. In this piece, we will take a look at this business loan in detail.

Punjab National Bank offers business loans of amounts ranging from Rs. 5 lakhs to Rs. 15 lakhs. These loans are offered to both businesses and self-employed applicants. One can obtain this loan at interest rates starting at 12.60% per annum. This loan can be obtained for flexible loan tenures ranging from 12 months to 60 months. This is a fixed-interest rate loan, which means that the interest rate remains unchanged throughout the tenure of the loan. The borrower can easily repay the loan in easy monthly instalments via PDC, ECS, or auto-debit.

Punjab National Bank Business Loan Eligibility Criteria

Any applicant who is a citizen of India having substantial ability to repay the loan is eligible for a business loan from Punjab National Bank. Given below are some of the other parameters that an applicant must fulfil to obtain a business loan from Punjab National Bank:

  • The minimum age of the applicant during loan application should not be less than 21 years old and not more than 58 years at loan maturity
  • The minimum turnover of the business should be at least Rs. 25 lakhs
  • The business should be in continuity for a minimum period of two years, in case of self-employed applicants, a minimum experience of two years is required in the field
  • In addition to primary security, the loan can be obtained against collateral security or a Credit Guarantee Scheme
  • Business must be generating a profit for the past 1 year
  • The lenders usually require the applicant to have a credit score above 650.

Punjab National Bank Business Loan Interest Rates

The Punjab National Bank Business Loan can be availed at interest rates starting at 12.60% per annum for loan amounts below Rs. 2 lakhs, and at 15.60% per annum for loan amounts over Rs. 2 lakhs.

Factors Affecting Punjab National Bank Business Loan Interest Rates

Given below are some of the factors that affect the interest rates for your Punjab National Bank Business Loan:

Nature of Business

The foremost factor affecting the interest rate for your business loan is the nature of your business. The nature of your business is an indication of the kind of business activity that you undertake. The business should present a positive outlook, and the place of business should not be on the blacklist. While determining your business loan interest rate, lenders assess the previous nature of your business to see how it functions and to determine if it is profit or loss-making.

Credit Score

A credit score is a 3-digit number that depicts the applicant’s ability to repay the loan. This score usually ranges from 300 to 900. Most lenders and banks in the country consider the applicant’s score before approving the loan terms. A credit score of 750 or above is deemed to be a healthy credit score. A high credit score has a good influence on loan providers. If you have a high score, you are more likely to obtain a loan at lower interest rates. If you have a poor credit score, your loan application might get rejected or be granted a higher interest rate.

Business Experience 

The experience of the business is taken into consideration since a well-established business is considered to be more secure. If your business has been in existence for a significant period of time, lenders are more likely to grant a loan at lower interest rates. A high-interest rate is charged for established businesses only if there has been a documented history of non-payment or default.

Annual Turnover

Each lender in the country determines the interest rate for your business loan based on the turnover of your business. If your business has a high annual turnover, then you are likely to be granted a lower interest rate. Inversely, if your business has a low turnover, you will be granted a higher interest rate. This is because most lenders will view your business to be a credit risk.

Revenue and Profit

Most lenders and loan providers in the country assess the business’s monthly, quarterly, and yearly revenue before determining the interest rate. The interest rate applicable is determined based on the revenue of the business. If the revenue is not up to the lender’s requirements, then your loan may be sanctioned at a higher interest rate.

Repayment Behaviour 

Another major factor affecting the interest rate for your Punjab National Bank Business Loan is the previous repayment track record. If you have a good repayment history, you may be granted a loan at low-interest rates. Regardless of how good your credit score is, if you do not have a good repayment history, the lender may provide the loan at high-interest rates. 

Punjab National Bank Business Loan Fees and Charges

The table given below shows the various different types of fees and charges associated with a Punjab National Bank Business Loan:

Details Charges
Interest Rates Starting at 12.60% per annum for loan amounts below Rs. 2 lakhs, and 15.60% per annum for loan amounts above Rs. 2 lakhs
Prepayment Charges There is a lock-in period of 6 months. Post 6 months, there is a foreclosure charge of 2% of the outstanding amount
No due/No objection Certificate Rs. 150 per certificate
Fees for altering terms and conditions 0.02% of loan amount, subject to a minimum of Rs. 1000 and maximum Rs. 5 lakhs

Documents Required for Punjab National Bank Business Loan

Punjab National Bank offers a suite of business loan options to its customers. Every option has a different eligibility and documentation criteria. Given below are the common set of documents required for any of the business loan schemes:

  • Duly filled loan application form along with passport-sized photographs
  • PAN card for the business
  • Address and Identity proof, such as Passport, Driver’s License, Voter ID card, Aadhaar Card, etc
  • Certificate of Business Incorporation
  • Bank statements from the last 12 months
  • P & L statement, balance sheet, sales tax returns, and ITR from the previous two years
  • Any other document as demanded by the lender

How is the EMI for a Business Loan Calculated?

Given below is the formula to calculate the EMI for a business loan from Punjab National Bank: E= P*r*(1+r)n/(1+r)n-1 In this formula,
  • E stands for the EMI amount
  • P stands for the principal amount
  • r stands for the applicable interest rate
  • n stands for the tenure of the loan

How Does Punjab National Bank Business Loan Compare to Other Lenders?

The table given below shows how the business loan offered by Punjab National Bank compares to other loan offers in the market:

Bank/NBFC Interest Rate
HDFC Bank 10.00% – 22.50% p.a.
Hero FinCorp Up to 26% p.a.
FlexiLoans 1% per month onwards
NeoGrowth Finance 19% – 24% p.a.
ZipLoan 1% – 1.5% per month (Flat ROI)
Tata Capital Finance 19% p.a. onwards
Axis Bank 14.65% – 18.90% p.a.
Lendingkart Finance 1.5% – 2% per month
IDFC First Bank 14.50% onwards
Indifi Finance 1.5% per month onwards
Kotak Mahindra Bank 16% – 19.99% p.a.
ICICI Bank 17% p.a. onwards
Fullerton Finance 17% – 21% p.a.
RBL Bank 17.50% – 25% p.a.
Bajaj Finserv 15% – 25% p.a.

Punjab National Bank Business Loan Customer Care Number

In case you have any doubts or queries regarding a business loan from Punjab National Bank, you can get in touch with the bank using the following methods:

Toll-free Numbers 1800-180-2222  1800-103-2222
Tolled Number 0120-2490000
Landline Number 011-28044907
Email ID care@pnb.co.in

FAQs

From refinancing to reducing your interest, we have the answers right here.

What is the interest rate of a business loan in Punjab National Bank?

The interest rate for a business loan from Punjab National Bank starts at 12.60% per annum.

What are the benefits of a Punjab National Bank business loan?

Some of the benefits of a business loan from Punjab National Bank are quick loan processing, swift loan disbursal, flexible tenure, and high loan amount.

Does Punjab National Bank have a fixed rate of interest for its business loans?

Yes, Punjab National Bank has fixed interest rates for its business loans starting at 12.60% per annum.

Does Punjab National Bank check for CIBIl score while processing a business loan?

Yes, PNB checks for the applicant’s credit score while processing the business loan. The bank usually prefers applicant’s with scores over 650.

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