Business Loans are very popular among people as it is beneficial for those who want to stand their own business. Business Loans are offered by lenders, credit unions, and banks. Your business needs to be old for at least 6 months. Apart from it, other factors like personal credit scores and the relationship with lends will also play a great role.

Professional loans are extended to self employed professionals such as doctors, chartered accountants and lawyers, based on their individual credit history. It also varies from bank to bank as to how much loan they can extend to that individual and the latter’s relationship with the particular bank. This loan is usually extended on personal rapport basis and in many instances some kind of collateral is taken in the form of mortgage of non-agricultural land, National Savings Certificates, Government Bonds, Bank’s Term Deposits, and Assignment of Life Insurance Policies etc. especially for loans extending over a certain threshold limit of say Rs 15-20 lacs. These loans are usually long term in nature and have payback tenure of about 5-7 years.

Term loans are the standard type of loan that can be for both personal and business purposes. The entire amount in a term loan is disbursed and is EMI (Equal Monthly Installments) based for a specific pre-defined tenure.
Term loans can be taken in foreign currency as well and is termed as Foreign Currency loans. Such loans are usually extended to exporters who deal in a different currency. This type of loan is cheaper than domestic loans as cost of capital employment is cheaper outside India. In Foreign Currency Loan, the loan amount is calculated in USD and converted and paid to the business in India as INR and is set off against USD payments received by the business.
The other variant is for domestic businesses in Domestic Currency Loan where the rate of Interest is pre-defined for a specific tenure and is EMI based as well.