Scale your Business to Indomitable Heights with an HDFC Bank Business Loan

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 It’s not uncommon for us to observe that any business life cycle experiences a phase when it requires expansion. The business seeks to grow itself by investing in capital expenditure or by upgrading the business equipment etc. Naturally, a huge cash flow is required to realise such an expansion. Also, it’s anybody’s guess that capital is required up front to start any business afresh. A best business loan can be the best financial assistance one can get in junctures such as these. No wonder that business loans are becoming popular means whenever an entrepreneur wants to fund any start-up venture or to scale up his existing business operations.

Many banks & financial institutions offer attractive business loan schemes these days with zero collaterals, pre-approved offers and highly competitive interest rates. In this blog, we will tell you all you need to know about HDFC business loans, one of the most popular business loans in India.

Features & benefits of an HDFC Business Loan

HDFC has introduced a variety of business loan products to cater to the needs of individuals, trading/manufacturing units and self-employed proprietorship/partnership firms. Here are some important features and benefits of HDFC business loans:

  • Facility to check online eligibility quickly
  • Hassle-free and fast approval and disbursal of  business loans
  • No  need of a  collateral/guarantor  for business loans up to Rs 40 lakhs ( Up to Rs 50 lakhs at selected locations)
  • The HDFC business loan interest rate is a highly competitive one. Moreover, you need to pay interest only on the amount utilized
  • Nominal pre-payment charges are applicable
  • Flexible loan repayment tenure from 1 to 5 years
  • Easy documentation. Only a few mandatory documents are required
  • Attractive loan balance transfer options. You can avail lower EMIs, waiver of processing fee and other offers.
  • Special low-interest offers are available for existing HDFC Bank customers
  • Transparent processing and no hidden charges
  • You will have an optional death/accident insurance cover along with your business loan. The premium is calculated on the basis of the loan amount disbursed.

HDFC Business loan eligibility Criteria

Any Indian citizen who has a source of income and has his own business (or about to start his own business) can apply for an HDFC Business Loan. He should also be competent enough to repay his business loan. The other parameters an applicant needs to satisfy are as follows-

  • Borrowers in the below-mentioned categories are eligible to apply for an HDFC Business loan-
  • Self-employed professionals-Degree/diploma holders (in disciplines such as medicine, engineering, company secretaries, accounting and designing) who are engaged in a profession and are directors/partners/sole proprietors of a company.
  • Private limited companies- A company with a minimum net turnover of Rs 40 lakhs per annum
  • Partnership firms- Trading, manufacturing or service related firms where profits from all stakes can be merged.
  • The minimum age of the applicant should be 21 years at loan application and 65 years at loan maturity
  • He should have a minimum annual income of Rs 1.5 lakhs
  • The business should be in continuous operation for a minimum of 3 years
  • The business should have a minimum gross turnover of Rs 40 lakhs
  • The existing business should be in profit for the last 2 years.
  • A CIBIL score in excess of 650 is desirable for approval of an HDFC business loan. If your business is doing well recently, the Bank may exercise some leniency in the eligibility criteria. But, you may be offered a higher HDFC business loan interest rate, in case you have a low credit score.

HDFC Bank business loan documentation criteria

Document checklist for an HDFC business loan in different categories are mentioned below-

  1. Documents for self-employed professionals-
  • Identity proof: Anyone from PAN/Voter ID /Passport/Driving License/Aadhar Card
  • Address proof– Anyone from Passport/ Aadhar Card/Lease agreement/Sales tax certificate/Electricity Bill/Trade license in the name of the sole proprietor
  • Financial documents– Copies of Profit & Loss statement/  IT returns for the last 2 years, audited by a chartered accountant
  • Last 6 months’ bank statement
  • Certified copy of Articles of Association certificate & Memorandum copy/partnership deed

  1. Documents for  Partnership Firms and Private Ltd. Companies

  • PAN cards of the directors and the entity
  • Identity proof( all director)–  Anyone from PAN/Voter ID /Passport/Driving License
  • Address proof( all director)– Anyone from Passport/ Lease agreement/ Sales tax certificate /Electricity Bill/ Trade license
  • Proof of managing directors and authorized signatories– Anyone from PAN/Voter ID /Passport/Driving License
  • Company identity proof– VAT/Sales tax/Service tax/ IT return/certified copy of partnership deed/Shops and Establishment Registration/Memorandum & Articles of Association
  • Financial documents- Copies of last 2 years of Income Tax returns/Profit & Loss Balance sheet for the last 2 years (audited by a CA)/Bank statement for the last 2 years

HDFC Business loan interest rates and other fee/charges

Category Rate/Charge
Interest Rate 12.75% to 21.90%
Processing Fees Up to 2.50%  of the loan amount per annum (a minimum of Rs 2359 and a maximum of Rs 88,500)
Prepayment Charges 4% of the principal outstanding for 7 to 24 months, 3% of the principal outstanding for 25 to 36 months, 2% of the principal outstanding for salaried individuals – beyond 36 months. Allowed only after 6 EMIs.
Loan Cancellation Charges No charge is levied. But the customer will need to pay interest during the period between disbursement and cancellation. Also, the processing fee will be retained by the Bank
Additional interest on overdue payment 2% per month, subject to a minimum of Rs 200
EMI Check bounce charges Rs 550 for every instance+ GST
Cheque  swapping charges Rs 500 +GST
Repayment mode change charges Rs 500 for every instance + GST
 Amortisation schedule charges  Rs 200 +GST

Interest Rates offered to HDFC customers during the period April’19 –June’19 are as follows-

IRR April’19 –June’19
Minimum IRR 11%
Maximum IRR 21.76%
Average IRR 17.67%

Annual Percentage Rate (APR) offered to HDFC customers during the period  April’19 –June’19 are as follows-

APR April’19 –June’19
Minimum APR 11.10%
Maximum APR 26.35%
Average APR 18.15%

*Rates are subject to periodic change. HDFC business loan interest rates and other fees/charges are subject to regular reviews and can differ from customer to customer depending upon a number of factors