Things to consider before opting for a Business Loan balance transfer
Business Loan has now become a very convenient way to establish a continuous flow of funds. In order to stay in the competition, several top banks offer various options to their customers.
Even though it may seem like a very favorable option, and it certainly is, however, there are things to know before a bank loan transfer can be availed.
First of all, the decision to transfer the Business Loan has to be an informed one. Several factors have to be taken into consideration. Some of the most important ones being the rules and conditions laid down by the bank.
- Rate of Interest: One of the major reasons bank loan transfer seems like a favorable option is that you can benefit from the various advantages offered by the different banks. Therefore, what becomes extremely important is to compare the different rates of interest offered by the banks. The interest on the loan taken, will in the long run, determine not just your savings but also the ease with which you can repay the loan. The rates offered by the top leading banks are extremely favorable and competitive; HDFC Bank, for instance, offers an interest rate that is as low as 15.75% on existing bank loan transfers. Moreover, it also charges an extremely nominal charge of just 0.99% as the processing fee. The benefits, however, include Life Coverage and Tax benefits, to name a few.
- Eligibility Criteria for Business Loan balance transfer: this is the most important aspect. The options might be plenty for you, but the final decision lies with the bank. Most of the leading banks try to make the eligibility criteria flexible and the application process hassle-free. HDFC Bank Business Loan, for example, has the following requirements:
- Borrowing capacity is judged on the basis of your repayment capacity. Simply put, the bank will assess the repayment of all previous loans to determine your eligibility as a prospective borrower
- The Bank prefers to offer its Business Loan to businesses that are at least 3 to–4-year-old and not to startups. However, keeping that in mind, self-employed individuals, Proprietors, Partnership firms are all eligible. The clients should be more than 21 and less than 65 years of age.
- The business turnover should be at least 40 lakhs
- The business should be profitable for at least the last 2 years and have a Minimal Annual Income (ITR) of 1.5 lakh per annum.
- Documents required for Business Loan transfer:
- A PAN CARD is mandatory, be it an individual/firm or company.
- A valid identity proof like Aadhaar Card, passport, voter’s id, driving license
- A copy of a valid address proof like Aadhaar Card, Driving License, Voter’s Id
- Bank statement of the previous 6 months and the latest ITR with computation of income.
- Proof of continuation (ITR/Trade license/Establishment/Sales Tax Certificate)
- Other Mandatory Documents like [Sole Prop. Declaration or Certified Copy of Partnership Deed, Certified true copy of Memorandum & Articles of Association (certified by Director) & Board resolution (Original)]
- Loan Tenure: it is important to have an easy and flexible loan repayment tenure. HDFC Bank, in this case, offers a very comfortable loan repayment tenure from 12- 48 months.
If you are looking to apply for a Business Loan, Click here.
What are the steps to a Business Loan transfer? Click here to read more.
*Terms and conditions apply. Business Loan at the sole discretion of HDFC Bank limited. Loan disbursal is subject to documentation and verification as per Banks requirement.