Term Loan in India

Every business enterprise needs credit for operation, growth, and expansion. In India Banks, NBFCs and Fintech are the major sources of funding for Businesses. Most pre-approved business loans are term loans. Businesses can check their suitability for a business loan through a term loan calculator.

Let’s understand what is a term loan, how to apply and calculate EMI for term loans.

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What is a Term Loan?

A term loan is a loan approved by a lender for a fixed amount that should be repaid in a specific time. The rate of interest of a term business loan can be both fixed and floating. The repayment tenure is between 12 to 60 months. Apart from business loans, personal loans, home loans, education loans, and auto loans are also term loans. Many banks offer pre-approved business loans to businesses with which they have a long relationship.

What are the eligibility criteria for a business term loan?

  • A Business must be operating for the last six months.
  • Quarterly turnover should be more than Rs. 90,000.
  • Applicant's minimum age needs to be 21 years.
  • Applicant should be an Indian citizen.

Documents required for business term loans?

  • KYC documents of the applicant
  • Proof of the operational business
  • Income proof of last six months
  • One-year bank statements
  • CIBIL report
  • ITR, Sales tax report

What are the benefits of term business loans?

  • The benefit of a pre-approved business loan is that it has lower term loan interest rates and higher loan amounts.
  • Term loan approval takes just 59 minutes and loan amount disbursal is quick.
  • The longer repayment tenure is the greatest benefit of a pre-approved business loan

How to apply for a business term loan?

To apply for a term loan, visit the official website of the lender, and fill the loan application form online. After submission lender will review and contact the applicant to proceed with the other formalities. Applicants should choose the right loan scheme as per their needs.

How to do Term Loan EMI calculated?

EMI calculators are available on all the financial websites. These can help to determine the EMI of the term loan that the applicant wants to take. There is a mathematical formula to calculate the EMI of pre-approved business loans.

EMI= P x R x (1+R)^N]/[(1+R)^ (N-1)

EMI - Monthly instalment.

  • P -loan amount
  • R - Rate of interest (Interest rate should be monthly)
  • N - The repayment period of the loan (It should be in months).

Solving Real problems

Ram Yadav

I have been running my business for over twelve years but have not been able to undertake expansion activities. I applied to Ziploan and they cleared my loan application in a very short span of time.

Kanchan Lata

I approached Ziploan for an equipment finance loan. Their eligibility criterion was easy to fulfill because it required only 2 years ITR and 10 lacs of annual banking credit.

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