Trade Finance Cost Calculator
Estimate the total cost of trade finance options — bank overdraft, CC limit, bill discounting or LC — to choose the cheapest funding for your trading cycle.
Result
| Cost Component | Basis | Amount (₹) |
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Disclaimer: This tool provides an indicative estimate for general planning only and is not professional, legal, financial, medical or engineering advice. Reference values are editable defaults that vary by location, vendor, regulation and date. Verify critical figures with a qualified professional. Varada Nexus accepts no liability for decisions made using this tool.
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Contact Varada Nexus for detailed consultationFAQ
When is bill discounting better than CC?
Bill discounting (against sales invoices) is typically cheaper (9–11%) and self-liquidating. CC is more flexible but carries higher non-utilization penalties. Use bill discounting for short, defined cycles.
What is the effective cost of an LC?
LC costs include opening commission (0.5–1% p.a.), advising fees, document handling, and any deferred payment premium. Total effective cost is typically 1–2% above plain bank rate.
What is MCLR and how does it affect my rate?
MCLR (Marginal Cost of Lending Rate) is the minimum rate below which banks cannot lend. CC/OD rates are MCLR + spread (1–3%). Always negotiate the spread and monitor MCLR resets quarterly.