Posted on
Jun 20, 2019

Getting a business loan will make you stabilize your business is a myth as long as you repay them on-time. Yes, at the time of financial crunch you opt for a business loan, then how can you repay them. No, this thought process will take you and your business into trouble. However, you need not panic reading this and stay away from business loans. There are ways to repay a loan before you realize them as a burden. Everyone can repay the business loan by following these effective Business loan repayment tips.

Without adding more words in the air let us come to the actual platform and share the right ways to help you repay your business loan. 

Before that, we would like to emphasize the need for clearing business loan promptly. To understand how to clear the business loan in India, first, you must know why you must repay.


  • Repaying loan punctually will improve your credit score which all of you will be aware and this score plays an important role when lenders make a decision to approve your loan.
  • That alone will not suffer when you do not repay the loan but your credibility. When you make payment correctly the lender builds a positive relationship with you and hence you enhance the chance of getting loans in the future.
  • In case you go for a secured loan, then the lender might seize the property that you pledged as collateral.
  • You can create a brand and grow your business. The lenders will become your brand ambassador and will put a word about your business to their clients. Thereby you will have a better chance to get more customers. 
  • Finally, you can always feel confident as this is the key to any successful business. Building trust on you is important and once you make a habit of repaying loans you will gain confidence and expand business applying for a subsequent business loan. Stress-free mind thinks beyond to design a hassle-free business model.


These tips are not just for following but to make it a practice to come up with flying colors in your business endeavor.

  • Planning

This is not a new suggestion we provide you with? Right from childhood, we hear this word planning. Referring to a beautiful quote by George S. Patton, “A good plan today is better than a perfect plan tomorrow.” Don’t wait to plan and it must be your first step when you start a business and apply for a business loan.

You must know where you are traveling and have a clear road map. We are not asking you to plan for the next 5 years, but a plan for your current business movement must be in hand and you need to keep tracking progress and stay updated. 

The moment you think of starting a business or expanding you will need money. Then you prefer a business loan but have you thought about the best way to utilize the fund. There you need to plan. Plan your expenses, revenue and make sure how you can repay business loans periodically.

  • Reducing Cost

When you make a plan you will be aware of the expenses and you can think about reducing all unnecessary expenses. Promoting business is required but you need to know how to promote it effectively and when to make use of resources.

For instance, start with free channels to promote until you get some customers. Here you are reducing cost. Likewise, do not over employ when you do not have enough money to pay a salary. Go for freelancing model and take help to make a one-time payment. These are a few effective ways to reduce overhead cost. 

Master many other ways to reduce cost and keep the ball rolling. Ensure repayment of business as a mandatory expense and reduce lavish expenses in all other areas still you stabilize in your business.

  • Improving Collections

Cutting cost is one aspect and increasing collection, sales, etc is another aspect. Both are two sides of a coin and they need to be handled in parallel. Simply reducing expense alone cannot generate huge money but improve sales to feel glad. Try to make your collection strategy right and collect money promptly from your clients. 

  • Understanding the loan terms

You might have enough money to repay but when you fail to understand the terms given by the lender you will always have shocks regarding your loan interest rates and charges. 

Have a detailed discussion, ask when you don’t know and get clarification before you accept the loan. Know you loan repayment dates, penalty clause and amount to be paid as interest, etc. These basic understanding will help you plan your budget. 

  • Prepayment

Prepayment is an important term when we talk about loan repayment. This is nothing but you repaying the business loan in advance to the stipulated loan tenure. You can do this by planning for surplus profit at one time to repay the principal amount. 

But there is a catch; the lender might suffer a loss when you prepay the loan amount as they will lose out on the interest. Hence lenders might impose some penalty clause on loan prepayment and you need to be aware.

If the prepayment penalty will be huge, then you need to make plans to save the surplus amount in a short duration term deposit and use that in installment to repay the loan. On the other hand when there is no such penalty clause then feel free to make prepayment and close the loan burden on you. 

  • Refinancing

The best option to choose for effectively repaying the loan is the refinancing option. Here you are not alone breaking your head but discuss your situation with the lender. Keep them posted about your financial status like how much you can repay and when. This will allow them to offer you new suggestions like refinancing etc, 

Being honest will always reward and here it works out that way. Refinancing is nothing but opting for a new loan with the latest interest rate. Yes, in the dynamic Indian finance market you might have a chance to reduce your interest rate. The lender will provide you with a new loan and interest rate which you can use partly to repay the previous loan and enjoy the benefits of the new interest rate to continue your business without any interruption. 

Thus, staying in touch with the lender even when you find it difficult to repay your business loan will be of great help. Never run away which will only complicate but not provide any solace. 


Repaying business loan is never a nightmare if you understand these tips and make it a habit. Enjoy applying for a loan by creating a good relationship with your lender by repaying loans on the dot. 

At FlexiLoans, we will help you by providing all the necessary support in financing and let your business flourish. Feel free to discuss with us about your business aspirations and let us make it a success together. Let money not be a constraint anytime for you to start or expand your business.