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  • HDFC Commercial Property Loan

    HDFC Commercial Property Loan is a financing product designed for commercial purchase of plots and ready premises/buildings. This loan is available mainly for purchase of office space, for professionals and non-professionals. This loan cannot be used for purchase of residential units.

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    HDFC Commercial Property Loan Features:

    The following are the key features of HDFC’s Commercial Property Loan:

    • The loan can be taken any of the following purposes:
      • Purchase of a built-up office space
      • Extension, renovation or construction of an office space
      • Balance transfer of a commercial loan from another bank
    • You can apply for the loan either individually or jointly. The joint owners of the property as well as any close family member can apply for the loan together.
    • The maximum repayment period is 15 years.
    • The loan amount available depends on the following conditions:
    Loan Amount Maximum Funding
    Rs. 20 lakh or less 90% of the cost of property
    Rs. 20.01 lakh to Rs. 75 lakh 80% of the cost of property
    More than Rs. 75 lakh 75% of the cost of property

    HDFC Bank Commercial Property Loan Interest Rates and Other Charges:

    The Commercial Property Loan comes under the Adjustable Rate linked to HDFC’s Retail Prime Lending Rate (RPLR). The interest rate on the loan could be reset every 3 months if the RPLR changes. If the interest rate goes up, the interest component in the equated monthly instalment (EMI) will increase and the principal component will go down. This in turn, will lead to increase in loan tenure. If the interest rate decreases, then the EMI will have a higher principal repayment component and a lower interest component, and the loan tenure will decrease.

    The current rates of interest at HDFC are as follows:
    Type of Loan Loan Slab Interest Rates
    Adjustable Rate Loan Any loan amount 8.75% to 9.75% p.a.
    TruFixed Loan – 2 & 3 Year Fixed Rate Variant Any loan amount 9.15% to 10.30% p.a.

    Processing fee: Up to 1.5% of the loan amount or Rs.4,500 whichever is higher plus GST.

    Pre-payment charges: In case of fixed-rate loan, there will be no pre-payment charges for up to 25% of the opening principal balance for the particular fiscal. But pre-payment of more than 25% of the opening balance or complete amount will attract 2% pre-payment charges plus GST. There will be no pre-payment charges for adjustable loan rate customers for any amount. The foreclosure charges are also waived off is partial pre-payment is made after 3 years of taking the loan, though full pre-payment will attract a fee of 2% plus GST.

    Conversion fee: The following fees are applicable for switching from one type of loan to another:

    • From fixed first rate loan (during the period of fixed rate of interest) to normal adjustable rate loan: 2% of the principal outstanding balance, the undisbursed amount, and applicable GST.
    • From fixed first rate loan (during the period of adjustable rate of interest) to normal adjustable rate loan: 0.50% of the principal outstanding balance, the undisbursed amount, and GST.
    • From normal adjustable rate loan to fixed first rate loan: 0.50% of the principal outstanding balance, the undisbursed amount, and GST.
    • Switch to a lower interest rate in the adjustable interest rate option: 50% of the difference of the two coupon rates with at least 0.50% of the principal outstanding balance as fees, subject to a maximum of 1.50% of the principal outstanding balance, plus GST.

    Delayed payment charges: Delay in interest payment or EMI will attract a fine of 24% per annum.

    Increase/decrease in loan term: Up to Rs. 500 plus GST

    Eligibility Criteria for HDFC Commercial Property Loan:

    The loan is available to the following persons:

    • Self-employed professionals (doctors, lawyers, chartered accountants, architects, consultants, etc.)
    • Self-employed non-professionals (traders, agents, contractors, shop owners, etc.)

    Documents Required for HDFC Commercial Property Loan:

    The following documents, which need to be self-attested, are required to avail an HDFC Commercial Property Loan:

    • Proof of identity: Passport/Voter’s ID/Aadhaar/Driving licence/PAN/MNREGA job card
    • Proof of residence: Passport/Voter’s ID/Aadhaar/Driving licence/MNREGA job card/ Utility bill not more than 2 months old/Latest bank account or post office saving account statement or passbook/ration card/rent or lease agreement
    • Proof of income:
      • Income Tax Returns along with computation of income for the last 3 Assessment Years
      • Last 3 years’ Balance Sheet and Profit & Loss Account Statements, with Annexures/Schedules
      • Last 6 months’ Current Account Statements of the business entity
      • Last 6 months’ Savings Account Statements of the individual
    • Business Profile
    • Latest Form 26AS
    • List of Directors and Shareholders with their individual shareholding certified by a CA/CS if the business entity is a company
    • Memorandum and Articles of Association of the Company
    • Partnership deed if the business entity is a partnership firm
    • Details of ongoing loans of the individual and the business entity including the outstanding amount, instalments, security, purpose, balance loan term, etc.
    • Passport size photographs of all the applicants/co-applicants
    • Cheque for processing fee favouring ‘HDFC Ltd.’
    • Proof of Own Contribution
    • Copy of Allotment Letter/Buyer Agreement of the property
    • Title Deeds including the previous chain of the property documents in case of resale

    FAQs on HDFC Commercial Property Loan

    1. Is it mandatory to insure the property that I buy?

      Yes. The property bought through loan from HDFC needs to be duly insured for al hazards such as fire. The beneficiary of the insurance should be HDFC as your property will be with the bank as collateral security for your loan.

    2. Do I have to provide any asset as security for the Commercial Property Loan?

      No. The property that you buy with the loan taken from HDFC will act as the collateral security for the loan.

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