{"id":13114,"date":"2020-12-11T08:45:22","date_gmt":"2020-12-11T08:45:22","guid":{"rendered":"https:\/\/tata-blog.osian.dev\/blog\/?p=13114"},"modified":"2024-12-06T15:59:25","modified_gmt":"2024-12-06T10:29:25","slug":"things-everyone-must-know-about-a-business-loan-agreement","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/loan-for-business\/things-everyone-must-know-about-a-business-loan-agreement\/","title":{"rendered":"Things Everyone Must Know about a Business Loan Agreement"},"content":{"rendered":"\n<p>When signing a business loan agreement, you will most certainly pay attention to eminent details such as the loan amount, the rate of interest, and tenure. But the loan agreementcontains a lot more than that. There is fine print that most people may overlook, but these details have a bearing on the amount that you ultimately end up paying.<\/p>\n\n\n\n<p>Therefore, make sure you read the fine print, and if you have any doubts, have your lender clarify them. You could also hire a lawyer to go through the loan agreement and explain every term and stipulation before you sign.<\/p>\n\n\n\n<p style=\"color:red\"><strong>Additional Read: <\/strong><a href=\"https:\/\/tata-blog.osian.dev\/blog\/business-loan\/how-to-apply-for-a-business-loan-in-4-easy-steps\/\">How to Apply for a Business loan in 4 easy steps<\/a><\/p>\n\n\n\n<p>In the meanwhile, to get you started, here is a list of business finance elements you must be wary of while reading your agreement.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Type of Interest Rate<\/strong><\/h2>\n\n\n\n<p>There are two types of <a href=\"https:\/\/tata-blog.osian.dev\/business-loan\/rates-and-charges.html\">business loan interest rates<\/a>&#8211; fixed and floating. If you are not aware of the difference between the two, the lender may make that choice for you. But the cost of borrowing can vary significantly with the type of interest rate applicable.<\/p>\n\n\n\n<p>Therefore, before you sign the loan agreement, make sure that you are aware of the kind of interest rate that is applicable and the effect it has on the repayment amount.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Pre-payment Penalty<\/strong><\/h2>\n\n\n\n<p>If you choose to prepay your <a href=\"https:\/\/tata-blog.osian.dev\/business-loan.html\">business loan<\/a>, most lenders will charge a pre-payment penalty. The loan agreement mentions the pre-payment clause, but applicants often tend to overlook it. Prepaying can be the right way to go when planned with all factors considered. But being unaware of the pre-payment penalty can lead to miscalculations, and this hidden cost may outweigh any savings you were hoping to make by prepaying the loan.<\/p>\n\n\n\n<p>Therefore, before signing the agreement, make sure you pay attention to the pre-payment penalty and other terms and conditions related to it.<\/p>\n\n\n\n<p><strong>Penalty on Default<\/strong><\/p>\n\n\n\n<p>If you miss any payments, you will have to pay the penalty on default. Throughout the tenure of the loan, there may be times when you don\u2019t have sufficient funds to pay the EMI. In such a case, you should know exactly how much you will have to pay in penalty.<\/p>\n\n\n\n<p>Different lenders may charge penalties differently, therefore make sure you read the loan agreement carefully to know how you will be penalized, in case you miss a payment. You can use an online business loan calculator to plan your repayment schedule and avoid defaulting.<\/p>\n\n\n\n<p><strong>The Guarantor\u2019s Role<\/strong><\/p>\n\n\n\n<p>To meet the business loan eligibility criteria, you may require a guarantor. Depending on the lender\u2019s terms, the guarantor may be liable to repay the loan if the borrower defaults. Therefore, to ascertain the role of the guarantor, both the borrower and the guarantor must go through the loan agreement carefully before signing.<\/p>\n\n\n\n<p>If you are looking for competitive interest rates, borrow from Tata Capital. We offer business finance with minimal documentation to ensure a hassle-free borrowing process for you. We offer tools like the <a href=\"https:\/\/tata-blog.osian.dev\/business-loan\/business-loan-emi-calculator.html\">business loan EMI calculator<\/a> to help you explore different repayment options.<\/p>\n\n\n\n<p style=\"color:red\"><strong>Additional Read: <\/strong><a href=\"https:\/\/tata-blog.osian.dev\/blog\/business-loan\/how-to-submit-your-business-loan-documents-like-a-pro-and-get-them-approved\/\">How to submit your Business loan documents like a pro and get them approved<\/a><\/p>\n\n\n\n<p>Visit our website, or give us a call today to learn more.<\/p>\n\n\n\n<div class=\"wp-block-group alignwide\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n<div class=\"wp-block-columns alignwide is-layout-flex wp-container-core-columns-is-layout-9d6595d7 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link has-vivid-cyan-blue-background-color has-background wp-element-button\" href=\"https:\/\/tata-blog.osian.dev\/online\/loans\/business-loans\/home#!\">Apply Now<\/a><\/div>\n<\/div>\n<\/div>\n\n\n\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\"><\/div>\n<\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>When signing a business loan agreement, you will most certainly pay attention to eminent details such as the loan amount, the rate of interest, and tenure. <\/p>\n<p><a href=\"https:\/\/tata-blog.osian.dev\/blog\/business-loan\/things-everyone-must-know-about-a-business-loan-agreement\/\">Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":13115,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[],"class_list":["post-13114","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loan-for-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Business loan Agreement: Things everyone must know about - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"Read here to know the key aspects of a business loan agreement. Click to get all the details about business loan agreement. Know more!\" \/>\n<meta name=\"robots\" content=\"noindex, nofollow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Business loan Agreement: Things everyone must know about - Tata Capital Blog\" \/>\n<meta property=\"og:description\" content=\"Read here to know the key aspects of a business loan agreement. Click to get all the details about business loan agreement. Know more!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/things-everyone-must-know-about-a-business-loan-agreement\/\" \/>\n<meta property=\"og:site_name\" content=\"TATA Capital Blog\" \/>\n<meta property=\"article:published_time\" content=\"2020-12-11T08:45:22+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-12-06T10:29:25+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.tatacapital.com\/blog\/wp-content\/uploads\/2020\/12\/business-loan-agreement.jpeg\" \/>\n\t<meta property=\"og:image:width\" content=\"770\" \/>\n\t<meta property=\"og:image:height\" content=\"400\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Tata Capital\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Tata Capital\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/things-everyone-must-know-about-a-business-loan-agreement\/\",\"url\":\"https:\/\/www.tatacapital.com\/blog\/loan-for-business\/things-everyone-must-know-about-a-business-loan-agreement\/\",\"name\":\"Business loan Agreement: Things everyone must know about - Tata Capital Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#website\"},\"datePublished\":\"2020-12-11T08:45:22+00:00\",\"dateModified\":\"2024-12-06T10:29:25+00:00\",\"author\":{\"@id\":\"https:\/\/www.tatacapital.com\/blog\/#\/schema\/person\/5ccf99347b9365e2fa68bd32006d0b4a\"},\"description\":\"Read here to know the key aspects of a business loan agreement. 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