Top 10 Best Private Banks in India List 2023
July 21, 2023
Many lending institutions offer Home loan for small business owners in India. One can apply for a loan from a bank or a non-banking financial company (NBFC) that provides home loans to small business owners. To qualify for a loan, you must provide documents such as your personal and business income tax returns, bank statements, proof of business ownership, and other documents demonstrating your ability to repay the loan. It is advisable to compare the interest rates, eligibility criteria, and other features of different home loan products before choosing a home loan for small business owners. The loan amount offered for home loans is subject to various factors, and the interest rate is determined after computing an applicant’s credit history.
Table of Contents
Top 10 Home Loans for Small Business Owners
The following table showcases the top ten home loans for Small Business Owners in India.
| Banks | Up to Rs. 30 Lakh | Above Rs. 30 Lakh to Rs. 75 Lakh | Above Rs. 75 Lakh |
| SBI | 8.85% – 9.75% | 8.85% – 9.65% | 8.85% – 9.65% |
| HDFC | 8.45% – 10.35% | 8.45% – 10.60% | 8.45% – 10.70% |
| LIC Housing Finance | 8.65% – 10.10% | 8.65% – 10.30% | 8.65% – 10.50% |
| ICICI Bank | 9.00%-9.80% | 9.00%-9.95% | 9.00%-10.05% |
| Kotak Mahindra Bank | 8.85% onwards | 8.85% onwards | 8.85% onwards |
| PNB Housing Finance | 8.50% – 14.50% | 8.50% – 13.00% | 8.50%-10.85% |
| Bank of Baroda | 8.90% – 10.65% | 8.90% – 10.65% | 8.90% – 10.90% |
| Union Bank of India | 8.85% – 10.75% | 8.85% – 10.95% | 8.85% – 10.95% |
| IDFC First Bank | 8.85% onwards | 8.85% onwards | 8.85% onwards |
| Federal Bank | 8.60%-10.20% | 8.60%-10.25% | 8.60%-10.30% |
Eligibility Criteria for Small Business Owners
Home Loan for Small Business Owners is applicable upon fulfilling the following eligibility criteria.
- The individual must be a business owner with at least two years of experience in their current business.
- The individual must have a good credit history and must be able to provide sufficient proof of income to demonstrate their ability to repay the loan.
- The individual must have enough equity in their business or other assets to serve as collateral for the loan.
- The individual must provide adequate time for the loan application and approval process.
- The individual must demonstrate that the loan proceeds will be used for legitimate business purposes.
Types of Small Business Owners in India
Small business owners or self-employed can be categorized into two categories:
Self-employed Professionals: individuals who provide professional services to their clients. For example, doctors, engineers, lawyers, and CAs.
Self-employed non-professionals: refer to small business owners who offer products or services to their customers.
Documents Required for Small Business Owners.
Home loans for Small Business Owners can be availed once interested applicants maintain a list of certain documents. To conclude the process, one must submit a self-attested copy of the following documents and the loan application.
Identity Proof: Aadhaar Card, Voter ID Card, Passport.
Proof of Residence: Passport, Voter ID Card, Aadhaar Card and Bank Account, Property Tax Statement, Utility Bills
Proof Of Income: PAN Card, TAN Card, Current account statements, and IT Returns.
Certified Financials: Profit and Loss Account Statement and Balance Sheet.
Property-Related Documents: Copy of Purchase Agreement
Repayment Terms
The applicant must honour the following repayment terms and conditions established by the bank.
Tenure of Loan
The banks predetermine the tenure of the loan. A home loan for small business owners can stretch up to 30 years, spreading out the repayments amount. However, the term can be up to 20 years if the interest rate is fixed.
Loan Amount
The loan amount offered to the applicant would be subject to several factors, such as repayment capacity, age, and property type. The market valuation of the property is accounted for to determine the LTV Ratio. Generally, the LTV ratio offered by the banks is as follows:
| Property Cost | LTV |
| Upto Rs 30 Lakhs | 90% of the Market Value |
| Rs 30 Lakhs to Rs 75 Lakhs | 80% of the market value |
| Above Rs 75 Lakhs | 75% of the market value |
How to Apply for a Home Loan for Small Business Owners?
Small Business Owners in India can apply for a home loan through a bank or a Non-Banking Financial Company (NBFC).
Banks typically require self-employed individuals to submit their income tax returns and other documents to prove their income. Additional documents required may include bank statements, financial statements, and proof of identity and address. S
Some banks also offer special home loan packages for self-employed individuals. The government also provides special schemes for self-employed individuals to apply for home loans, such as the Pradhan Mantri Awas Yojana (PMAY) scheme.
FAQs
Are small business owners in India offered special home loan schemes?
Many top lending institutions in India offer a variety of home loan schemes specially designed to cater to the financial needs of self-employed individuals.
What home loan amount can I borrow as a small business owner in India?
The loan amount a small business owner can raise from a bank is subject to the loan application.
Are there any interest rate concessions for small business owners in India?
One can reach out to the official channels established by the bank to gain knowledge on the concessions offered to eligible applicants for a home loan.
As a small business owner in India, can I transfer my existing home loan?
Many lending institutions offer a balance transfer facility. One can transfer their loan balance to a different bank for lower interest rates.
