Home Loan Surrogate Policy: A Detail on How to Get a Business Loan Seamlessly

To secure a business loan was not as easy as it seems, even a few years ago. Now it has become easy with the support of leading banks like HDFC, where you are able to secure a loan with a good home loan repayment record. For everything in detail, continue reading this article and reveal the suspense. 

The most difficult part of the home loan application procedure is completing the documentation, particularly for people with their own businesses. Things become more complicated if you wish to switch your loan from one specific bank to a different one. 

Banking institutions now provide a surrogate balance transfer option for people looking to switch their present home loans to a different financial organization. A self-employed person is not required to produce a large number of statements of earnings and balance sheets under this plan; rather, the amount they repay is used to determine loan eligibility.

The steps of evolving a property into a home are a wonderfully delightful one. Putting your nameplate on the entrance gives you an emotion of happiness and joy that is extremely satisfying. 

HDFC Bank acknowledges the importance of owning a house and is devoted to assisting you in making that goal a reality through Home Loans. But after getting your home ready, don’t forget to pay back the money you borrowed to make your home. Interestingly, if you pay back the amount you took on time, you will have an abundance of opportunities to meet your business aspirations.

Check Here How Refer Loan Can Benefit You!

ReferLoan’s unique Home Loan Surrogate Policy makes it simple to achieve one’s business goals. Bidding farewell to the confusing eligibility requirements, the professional experts at Refer Loan have simplified the whole thing for you. Now, you may get funding of up to Rs. 25 lakh based on your financial records and home loan repayment history. Are you prepared to move forward with your entrepreneurial aspirations? Read this article and learn in detail about the home loan surrogate policy.

A banking surrogate determines an applicant’s eligibility only based on their banking records. This offering is specifically developed to serve clients with fluctuating monthly incomes and profits, i.e., entrepreneurs. 

The Reason for Choosing This Option

Although options are limitless, here are some frequent reasons why a surrogate loan for business might be arranged to support you.

  • Managing the operational capital needs.
  • Buying raw materials.
  • Accepting orders in large quantities.
  • Buying inventory and paying vendors in advance.
  • Making payments for administrative expenses such as rent and office bills.

Key Highlights of Home Loan Surrogate Policy

  • Self-employed individuals may qualify for loans despite not having an ITR or any additional financial documentation.
  • Financial assistance is only capable of being granted based on bank statements.
  • The self-employed applicants’ earnings are solely assessed using statements from the bank.
  • Several banking accounts might be regarded as having increased loan eligibility.
  • There is no limit to the number of accounts in a bank that can be evaluated for eligibility for borrowing.
  • Except for those who are self-employed and are professionals such as doctors, CAs, CSs, and architects, all self-employed individuals must maintain current accounts.

Check The Table for Details about the New Home Loan Surrogate Policy

Loan Amount 5.00 Lacs – 25.00 Lacs
Tenure 12 – 36 Months
Business Vintage Min 3 Years
Profile Allowed Individual / Proprietors
Banking Norms Min Average Bank Balance Rs. 25,000
Eligibility Based on a Home Loan Paid Track

Exclusive for Internal Home Loan Customers

Location PAN India

Almost all financial institutions offer loans based on your real earnings, which at first is the most secure alternative. Although keeping businesspeople in India in mind and the fact that the nation’s tax rate is rather high, banking organizations have designed packages that allow an entrepreneur or someone in the profession to get funding for a home purchase or a loan against property (LAP) without needing to present paperwork.

These initiatives are for people with an excellent record of paying back loans and/or long-term business in a specialized field, as well as a pretty solid bank balance.

A Few Important Factors You Should Know

Loan Track: If the applicant holds other huge loans, such as a machinery loan, a mortgage, or an automobile loan, and pays them back with a flawless record of no defaults, the prospective lender may offer the very same or a little bit less of a house loan to the customer. The sticking point is that the second loan mustn’t have been completed or repaid over 6 months ago.

Bank Balance: If the person applying has good financial standing and the standard monthly balance can adequately support the fresh installment for the housing loan or LAP he wishes to take, the lender may approve it.

EMI Equalizer: The fresh house loan or LAP can be granted based on the overall number of other loan EMIs that an applicant is currently repaying. Overall exposure is limited to one and a half times the present amount of EMI, which is the market’s standard. 

Same Loan Tracks: If the applicant hesitates to go through the documentation again during a home loan transfer, the switch can be made using the prior track on the exact same loan. The current bank’s lower EMI may also allow you to take out a further sum as a ‘top-up’ loan without requiring any additional documents.

Gross Profit Strategy: In industries with large turnover but low-profit margins (such as certain trade businesses), banks approve calculations based on the amount of gross profit rather than net profit.

Turnover Determined by Industry Margins: When the loan recipient is in the business of manufacturing or trade, the person receiving the loan has defined an assumed margin of profitability internally.

In this scenario, a production facility with an annual turnover of 2 crores is projected to generate a 10% profit; therefore, the net profit can be calculated as 20 lakhs, and the request for borrowing can be approved based on this, regardless of whether it has not been reported. 

In a comparable way for a trading company, it may have been placed at 5% since there is no equipment or production facility as an asset in question, and it surely would have been marked at a bit higher risk level. 

Gross Receipt: This plan is beneficial for professionals who are self-employed, such as CAs, architects, engineers, and doctors, who, despite receiving a large gross amount, may have the amount they make in net profit depleted due to wages to their personnel or other operational costs, etc. For these individuals, financial institutions use a particular criteria-based assessment approach based on gross receipts.

Liquid Income: A group of chartered accounting professionals selected by the financial institution visits the applicant’s workplace to learn about the intricacies of its operations and prepare a rough estimate. For example, whether a person owns a stationery business, sells sarees, or transports truckloads of sand from one location to a different location, it’s unclear whether or not the paperwork is in existence.

Nearly all transactions are completed without a valid bill and challan, and there are occasionally several transactions that do not include a receipt. Interestingly, these could be very prosperous businesses that are risk-free to lend to.

No Income Evidence (60:40): If the applicant contributes 60% of the property’s cost for purchasing and has a good credit score, 40% will be funded as a home loan with no regard for the applicant’s earnings papers. This is due to the applicant’s majority share (investments) in the home, a fact that makes the lending institution secure, specifically if he has no previous negative credit record.

Superior Relationships assure Pre-approval: Several banks present ‘pre-approved’ loans depending on the applicant’s profile and banking connection, including deposits as well as investments conducted through the bank’s network. This does not involve the filing of any income proof, merely compliance with the obligatory KYC criteria.

Bottom Line

India’s thriving small- and medium-sized enterprise sector is driving the country’s economic growth. Tiny emerging firms reflect the spirit of entrepreneurship among the people and contribute significantly to the GDP and employment opportunities in India.

Refer Loan recognises the importance of providing monetary as well as expansion support to entrepreneurs. Refer Loan offers tailored financial answers to support businesses at every stage of their journey. If you are thinking of a loan but confused, from where to take out a loan, then stop at Refer Loan. 

A representative from Refer Loan will guide you through the entire process. Thousands of people every year take out loans for multiple purposes and they are happy with Refer Loan’s offerings. Refer Loan makes it possible for you to save both money and time while utilizing a simple, straightforward, and completely open financial journey.


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