Running your own business is one of the most challenging tasks in present times. When you start your business, you somehow manage to arrange the necessary money to set things rolling but after some time, you may start facing a financial crunch. This could be due to delay in payments being released, bad debts, or the rising cost of running day-to-day operations. In such a situation, availing a Business Loan can be a good option as compared to seeking money from private lenders or unreliable sources that levy heavy interest rates.
Are unsecured Business Loans available in India?
There is no need to worry if you don’t have any collateral to avail a secured loan. You can now apply for a Business Loan without any security as well. Many financial institutions in India offer unsecured loans for established business owners and help them tide over tough times. One of the leading financial institutions offering attractive features with its Business Loans is HDFC Bank.
About HDFC Business Loan
HDFC is a leading private sector lender of India that offers unsecured Business Loans for its customers. As HDFC Business Loans are unsecured in nature, there is no need to offer collateral, guarantor, or any security. The money availed can only be used for commercial purposes. If you need money for personal usage, then availing a Personal Loan will be more beneficial. The bank supports the online application process and completes the entire process of a Business Loan within a few working days.
Eligibility for an HDFC Business Loan
If you wish to apply for an HDFC Business Loan, then you need to fulfill the below-mentioned eligibility criteria:
- The age of the applicant should be at least 21 years and less than 65 years at the time of application.
- The annual turnover of the business in the previous year must be at least Rs. 40 lakh.
- The applicant must have at least 5 years of business experience, out of which 3 years must be in the current business.
- The applicant/business must be filing the ITR of at least Rs. 1.5 Lakh or more.
- The business must be a profit-making venture for the last two years.
Documents required for HDFC Business Loan
HDFC Bank requires you to provide the below-mentioned documents for an unsecured Business Loan:
- Completed application form with signatures of all the applicants.
- KYC documents for all applicants (PAN, AADHAR, Passport, Driving License, Voter ID, etc.)
- Business Registration Documents.
- ITR for the last 2 years along with all annexures with audit report from a CA.
- Bank statements for the last 6 months (Current Account and Savings Account)
- GST/VAT Returns for the last two years.
- Proof of continuation of business
- Other documents that may be required on a case to case basis.
Why is HDFC Business Loan the best pick for you?
If you are wondering about the benefits of availing an HDFC Business Loan, then here are the various advantages of this offering that you should note:
- No Security Required: HDFC Business Loans are unsecured; thus, you need not offer any collateral to secure the loan amount. This relieves you of any worries regarding losing your collateral in case of any problems with repayments. Moreover, the absence of collateral significantly reduces the processing time.
- High-Value Loans: The maximum amount available as an HDFC Business Loan is Rs 50 Lakh for major metropolitan centres and Rs. 40 Lakh for other locations. Such high-value loans are extremely useful for a business where the need for the funds is usually significant. You can easily manage your requirements with this amount and bring your operations back on track.
- Attractive Interest Rates: HDFC Business Loan Interest Rates start from as low as 11.90%, which is significantly lower than what other lenders offer. Lower interest rates help reduce the EMI amount you will have to serve, thereby reducing the chances of any default and also help you in saving on your interest outflows.
- Flexibility to use the money: There is no need to secure any approval from HDFC Bank before using the money. You are free to use the money for any business requirement that you may have. If you intend to use the money for any personal requirement, then you must intimate the bank.
- Drop Line Overdraft: You can also avail this facility from HDFC Bank in the form of a drop line overdraft wherein the approved limit reduces by a set amount every month. You need to pay interest only on the amount you have utilised and not on the sanctioned amount. The maximum amount available as Dropline OD is Rs. 15 Lakh, with the available repayment tenure going up to 48 months.
- Flexible Repayment Tenure: The repayment tenure available with HDFC Business Loans ranges between 12-48 months. Choose tenure & EMI according to the affordability.
- Low processing charges: The processing charges levied by HDFC Bank for its business loans are 2.50%, which are subject to a minimum of Rs. 2,359 and a maximum of Rs. 88,500. These are quite competitive when compared with other lenders.
- Prepayment facility available: You can foreclose your HDFC Business Loan after 6 months of disbursal. The foreclosure charges vary between 2% to 4% depending on the repayment tenure. You should use Business Loan EMI Calculator to assess the affordability of the loan.
- Credit Protect Plan: You can avail the Credit Protect Plan by paying a nominal premium at the time of disbursal. This facility protects your family in case of your untimely death. The bank’s dues are settled by the insurance company. You are also entitled to associated tax benefits on this plan.
The features offered by an HDFC Business Loan are quite noteworthy, and the offering is indeed worth considering. However, you ought to be a responsible borrower and conduct a thorough analysis before making a final decision.
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