Business Loan for Petrol Pump: Learn about Interest Rate, Eligibility and Repayments

Aug 17, 2020

One look at the busy Indian streets can highlight just how popular cars and bikes have become with consumers today. As per a Statista report from 2017, an estimated 253 million vehicles were plying on Indian roads at that time. The numbers have only increased in the past three years. With such a large volume of motor vehicles comes the increased demand for fuel as well.

Therefore, running a petrol pump can be a profitable venture in the country, with demands expected to spike further in the future. If you have such a plan outlined, you must pay special heed to acquiring a business loan for petrol pump to kick-start your venture.

Capital Requirement for Your Petrol Pump Business

The initial investment on such a business depends largely on the location selected and the scale of operation. For instance, for a petrol pump in a rural locality, you need to assign around Rs.15 Lakh for kick-starting this business. For an urban petrol pump, initial investments tend to be significantly higher, generally in the range of around Rs. 30 Lakh if opening one on own land, according to a Paisa Bazaar report.

Apart from this, you also need to bear additional charges to start such a venture. They include –

  • License fee
  • Fixed fee
  • Application fee

Business loan for petrol pump is a popular option to fund these expenses. Know that unsecured credits come with higher interest rates compared to business loans secured by collateral.

Petrol Pump Business Loan Eligibility

Even though the business loan for petrol pump loan eligibility criteria differ from one lender to another, the criteria mentioned below tend to be common to all banks and NBFCs.

  • You should be an Indian citizen to avail such a loan.
  • Your age must be between 21 and 55 years.
  • If you already own a petrol pump business and are applying for the loan to expand operation, your business should be at least 6 months old.
  • You must also meet the minimum yearly turnover amount when availing a loan for an already existing petrol pump business.

Apart from checking your eligibility, keep an eye on the business loan for petrol pump loan repayment facility available to you. Tenure for such credits can range between 36 and 60 months. Longer repayment terms lead to higher overall interest payment on the loan, and vice versa.

Are the eligibility criteria or other terms on a selected business loan sound unfavourable? Its time to look for alternatives!

Besides business loan for petrol pump, you can consider one of the following options to fund any business.

  • Fixed deposit returns
  • Mutual fund earnings
  • Bonds and shares
  • Cash in your savings account

However, given the funding quantum required, these options may not suffice and you would require looking for financing from an alternative source with a scope for high-value loan.

Perhaps a much better approach would be to utilise the idle equity stored in gold ornaments and jewellery lying in your safes to raise finance for your petrol pump venture.

Why Should You Look into Gold Loans?

Almost every Indian household possesses some gold jewellery or the other. You may possess this precious metal valued at a substantial amount, which can be utilised to acquire necessary finance for your dream project. Gold loans present an opportunity where you can monetise on such jewellery, without pawning or selling them.

Numerous lenders today are ready to provide a substantial loan principal against pledged gold, depending on the purity of the ornaments and the present value of gold in the market. Another factor that plays a role in determining the loan amount is LTV or loan to value ratio that a lender is ready to extend.

Benefits of Gold Loans for Setting Up a Petrol Pump Business

Rupeek Fintech Private Limited provides gold loans at favourable terms while easing the entire process substantially. Some of its beneficial features are listed below to give you a better perspective on such loans –

  • Highest per gram value

The gold loan principal is calculated based on the weight and purity of your pledged gold. The price of gold on the day you avail this credit is taken into account for calculations. Rupeek thus offers the highest per gram value on the gold pledged, thus maximising the loan value. You can also look forward to the highest LTV with Rupeek. LTV or loan to value ratio is the portion of gold’s value that the lender can extend as loan.

As per RBI’s directive, lenders can provide gold loans with values up to 75% of the pledged item’s market valuation. Therefore, the highest LTV can help you establish or expand your petrol pump business with considerable ease.

  • No need to venture out of your homes

Carrying gold items to a lender’s branch is a risky prospect. Thus, to minimise such hassles, Rupeek Fintech Private Limited has launched an industry-first doorstep facility for its gold loans. Using this, you can apply for a loan online and wait for a loan manager from the lender to visit your premises.

He/she will then evaluate your pledged items and weigh the actual gold in the jewellery. Based on the results, an appropriate amount is approved and disbursed to your account as the loan principal. It takes only 30 minutes for the process to complete. Also, the manager leaves your house with the pledged gold only after the approved quantum is disbursed to your bank account.

Additionally, the entire process is streamlined with this doorstep facility, reducing hassles for a borrower greatly.

  • Minimal documentation required for the loan

Rather than requiring an inordinate amount of your time arranging for documents related to a business loan for petrol pump, gold loans are available with just a few documents. You only have to submit KYC documents, including your identity and address proof for the documentation process to complete.

You may have all of these documents right there at home, further simplifying the loan application and approval procedure.

  • Secure storage for gold

Are you worried about how your jewellery is handled during the loan tenure?

While such concerns are only natural, you have no reason to worry. Rupeek Fintech Private Limited takes immense care when it comes to the safety and security of all gold items. After leaving your home, the loan manager carries the gold jewellery in a GPS-trackable bag and drops it for storage in a secure vault at the nearest partner bank branch.

An insurance policy further eliminates any need to worry for the asset’s loss. Thus, rest easy knowing that you can release your gold assets in the same condition that you pledged them while availing the loan.

  • Low interest rates

Gold loans are available at attractive rates, lower than many other conventional sources for business funding. Therefore, as a gold loan borrower, you need to bear a reduced repayment burden due to a low interest payable on such funding.

Gold loans can act as a safe and favourable alternative and serve appropriately as a business loan for petrol pump. You can utilise online calculators to determine the maximum loan eligibility against the weight and purity of your pledged jewellery to understand the availability of finance for your petrol pump business.