HDFC Business Loans: Everything You Need to Know

Making our dreams come true is probably one of the happiest things that we can do for ourselves, but sometimes we can get in a pickle when we don’t have the finances to fund them. Especially when it comes to building businesses. In order to be well prepared whenever there’s a need, you need to have adequate funds at hand.

A Business Loan can help you set up your business and lift it off the ground to get consistent profits and revenue. In this post, you find all you need to know about HDFC Business Loans.

What is a Business Loan?

A Business Loan is a loan amount that is given specifically to financially address your business needs. These can be anything related to your business like funds for buying office supplies, for paying the salaries of the employees until the business starts earning a better revenue, or any other such need.

You need to keep in mind that you will need to explain exactly why you need a Business Loan to your bank. For example, if you’re using the loan to pay the salaries of your employees, then you will need to give the details of how many employees you have and for how long you will be using the loan amount to pay their salaries. This is to ensure that you have a definite plan in place and that you will not forfeit from repaying the loan.

HDFC Business Loans

HDFC ensures that all your business needs are met along with keeping your necessities in mind. Along with overdraft facility and flexible tenure options, the bank can also disperse the loan amount within 48 hours.

Features of HDFC Business Loans

  • Loan amount of up to Rs. 50 Lakhs.
  • Interest rates range from 15.65% to 21.20%.
  • Processing charges are up to 2.5% with a minimum amount of Rs. 2,359 and a maximum amount of Rs. 88,500.
  • Receding prepayment charges: 4% of outstanding principal if done within 7-24 months, 3% if done within 25-36 months, and 2% if done after 36 months.
  • No collateral, security, or guarantor required.
  • Loan amount can also be used for other needs like child education and home renovation.
  • Low interest rates and processing charges if you are transferring your loan from another bank.
  • Overdraft facility up to Rs. 15 Lakhs without any security till the end of the tenure
  • Flexible tenure of 12 to 48 months.
  • A nominal premium can insure your loan to keep you protected.

Eligibility Criteria for HDFC Business Loan

To be able to get an HDFC Business Loan, you will need to meet the criteria listed below:

  1. You should be at least 21 years old and not more than 65 years old at the end of the loan tenure.
  2. You need to be a self-employed individual, a proprietor, or have a partnership firm or a private limited company in the field of trading, manufacturing, and services.
  3. Your business should have an annual turnover of minimum Rs. 40 Lakhs.
  4. You will have to be running your business for at least 3 years with a minimum experience of at least 5 years doing business.
  5. Your business has been making profits for the past 2 years.
  6. Your business should have a minimum annual income of Rs. 1.5 Lakhs per annum.

Documents Required for HDFC Business Loan

You will need to ensure that you have all of the documents mentioned below in place before Applying for Business Loan. This is to ensure that the processing of your loan application is faster.

  • PAN Card: Of individual/company/firm
  • Identity Proof: Any one of Aadhaar Card, Passport, Voter ID, PAN Card, or Driving License
  • Address Proof: Any one of Aadhaar Card, Passport, Voter ID, or Driving License
  • Bank Statement: Of your or your company’s account of the past 6 months
  • Your latest Income Tax Returns file
  • CA certified profit and loss accounts and balance sheets of your company for the last 2 years
  • Proof of continuation of your business: Sales Tax Certificate, ITR, Trade License, or Establishment Certificate
  • Other mandatory documents
    1. Declaration of sole proprietorship
    2. A certified copy of the partnership deed
    3. Original copy of Board resolution
    4. Original copy of Memorandum and articles of association that is certified by the director

Benefits of Getting HDFC Business Loan

HDFC ensures that you have the best experience with your Business Loan. For this HDFC gives you benefits like overdraft facility, easy loan transfer, and also insurance protection for your loan.

The Dropline Overdraft facility on your loan allows you to get additional loan amounts of up to Rs. 15 Lakhs without any security or guarantor. On top of that, you only need to pay the interest for the amount of overdraft loan taken by you. This limit amount is stored in a separate account and is dropped to your current account every month till the end of the tenure.

If you choose to transfer from another bank to HDFC Business Loan, then you can reap benefits like interest rates as low as 15.75% and 0.99% processing fees.

The Credit Protect plan also allows you to forget your worries after borrowing the loan. A nominal fee can help you keep your family protected if something were to happen to the borrower. In case of the untimely death of the borrower, the family or the nominee need not repay the loan amount. It also gives you life coverage and tax benefits, all in the same scheme.

Other Details to Note

Do note that along with all these benefits, you will be unable to foreclose or part prepay the loan amount in the first 6 months after the loan disbursal. You will be able to foreclose the loan amount from the 7th month. The prepayment charges for the 7-24 months will be 4% of the principal outstanding amount. Similarly, for 25 to 36 months, it will be 3%, and for more than 36 months, the charges will be 2%.

There will also be no loan cancellation charges if you choose to cancel the loan. However, you will need to pay for the interest charged in the period between the loan disbursal and the date of cancellation.