- Overview
- Interest rate and fees
- Factors
- Benefits of Business Loan in IDBI Bank
- Eligibility
- Documents Required
- Different types of loan schemes offered by IDBI Bank
- MSME Finance
- IDBI Bank MSME Loans for Traders, Dealers and Distributors
- IDBI Bank Loan to Small Road and Water Transport Operators
- IDBI Loan SME against Commercial and Residential Properties
- IDBI Bank Finance to Doctors and Medical Practitioners
- IDBI Bank Vendor Finance Program
- IDBI Bank General Credit Card Loan Scheme
- IDBI Bank Laghu Udyami Credit Cards
- IDBI Bank Stand Up India Loan Scheme
- IDBI Bank Mudra Loan Scheme
Overview
An essential purpose of a Business Loan in IDBI Bank is to provide cash flow support to businesses when they lack the funds to operate. It provides them with a means to expand and grow their business. The services they provide are usually remunerated by a small percentage of interest rates.
An essential purpose of a business loan is to provide cash flow support to businesses when they lack the funds to operate. It provides them with a means to expand and grow their business. The services they provide are usually remunerated by a small percentage of interest rates.
Associated with the Indian banking sector, IDBI provides banking solutions to individuals and business clients alike. One of the many services IDBI offers is financial assistance to MSMEs, start-ups, and existing businesses. Also, it offers a multitude of banking services on a single platform. With the aim of offering a variety of solutions to MSME Entrepreneurs, the Bank is constantly introducing new products.
The following sections will discuss the different types of services offered by IDBI, as well as ROI, eligibility criteria, documents required for the loan application, and commonly asked questions.
Highlights
- This loan is intended for expanding and modernizing your business units, acquiring assets, establishing new ones, and so on.
- Loans are extended to self-employed professionals and non-professionals
- There are both secured and unsecured security measures
- The term of service can range from 12 to 60 months
Interest rate and fees
| Rates of interest | 12.25% to 13.50% |
| Processing fee | 1% |
| Loan amount | Min 50,000 and Max Rs 5 Lacs |
| Pre-payment facilities | Allowed after the first EMI. Before 6 months – 2%, After that Nil prepayment charges. |
| Lowest EMI | As low as 2237/- per Lac |
| Foreclosure charges | Allowed after the first EMI, within six months, 2% after that NIL |
Factors
Banking institutions have different terms and regulations for assessing and approving a business loan request. These terms fall under the jurisdiction and authority of the bank. There are several factors that your rates of interest are based on the following parameters:
Loan amount: The approval of your application is based on the amount that you have requested. Generally, larger loan amounts will result in better interest rates, and vice versa.
CIBIL score: The company’s rating or if it is a startup, then the individual’s. Anything above 750 is considered ideal.
Business turnover: Should be a profitable business with an annual turnover of at least 30 Lacs
Time in business: Should have been in business for a minimum of 36 months.
Type of business: Individual, Partnership, Private Limited Company or Public Limited Company.
Length of Term: The shorter the term on your loan, the quicker you can pay it off resulting in a lower rate of interest.
Credit history: A lender would be less familiar with your repayment ability if you have a limited credit history. Consequently, this might make you an uncertain choice. Hence, a lower rate of interest will be applied when your repayment history is favorable.
Benefits of Business Loan in IDBI Bank
- Hassle-free process
- Attractive rates of interest
- Faster credit delivery
- Complete banking solution in one place
Read More: Sundaram Finance Ltd. Businesss/SME Loan
Eligibility
The following are factors you should consider if you want to utilize a Business loan from the bank:
Age: Applicants must be at least 22 years old at the time of application and no older than 58 years old at the time of the last repayment
Income potential: You will be required to present the bank statement as a proof of income. This should indicate at least two years of profits and a minimum turnover of 30 Lacs.
Stability: Your business should have been in operation for at least three years. Banks may also require proof of 3 consecutive years of sales growth. An indication of a drop in sales may not be helpful to you.
ITR and Banking: Only after they have thoroughly examined your ITR and bank statement will the bank approve your loan. In addition to your ITR for the past 2 years, you will need to submit your bank statement a minimum of 6 months back.
CIBIL score: The bank will only consider candidates with an ideal score above 750. A good credit score is essential for hassle-free loan approval. Your past repayment capability will also be reviewed.
Taking everything into account, calculating EMI manually can be time-consuming and difficult. Why not calculate your EMI by yourself in a matter of minutes, by doing away with the paperwork entirely?
It is possible to do that! A business loan calculator is available on IDBI’s official website. You can use this tool in order to get an average idea of your eligibility, along with the maximum loan amount and the interest rate that you can qualify for. Calculations are made based on several factors, including your age, your income, the amount required, and the repayment period that suits you best.
Documents Required
- A copy of the PAN Card – Organization/Company/Personal
As proof of identity, please provide one of the following documents:
- A copy of the Aadhaar Card
- Passport copy
- Copy of the Voter’s ID Card
- PAN Card
- DL
As proof of address, please provide one of the following documents:
- A copy of the Aadhaar Card
- Passport copy
- Copy of the Voter’s ID Card
- DL
- The bank statement from the past six months
- The most recent ITR along with the Income Statement, Statement of Cash Flows, and CA audited and certified Profit & Loss Account for the past two years.
- Continuation proof (Income Tax Returns/Trade permits /Company Registration/Sales Tax Certificate)
- Documents other than those listed above [ Declaration in case of a sole proprietorship or Registered Partnership Agreement, signed and notarized Memorandum & AoA (certified by Director) & Board resolution (Original)]
Different types of loan schemes offered by IDBI Bank
IDBI offers a variety of business loan schemes to the different segments of the business. Some of their popular solutions are as follows:
MSME Finance
Small businesses can borrow from IDBI Bank for their financial needs. The bank extends MSME loans at interest rates that are affordable through a straightforward lending approach, which ensures prompt reimbursement to borrowers.
The MSME loans offered by IDBI Bank are
- MSME Loan for Wholesale and Retail Traders, Dealers and Distributors
- MSME Loan for Small Road and Water Transport Operators
- Loan SME against Commercial and Residential Properties
- Finance to Doctors and Medical Practitioners
- IDBI Bank Vendor Finance Program
- General Credit Card Loan (IDBI-GCC Loan)
- Laghu Udyami Credit Cards (LUCC)
- Stand Up India Scheme
- IDBI Mudra Loans
Read More: Muthoot Finance Ltd Business/SME Loan
IDBI Bank MSME Loans for Traders, Dealers and Distributors
Formerly known as the Sulabh Vyapar Loan, was developed to provide capital to small and medium-sized businesses to facilitate growth or meet other economic needs. Loan amounts up to Rs. 5 Crores can be accessed through this loan. The scheme is ideal for businesses in the MSME sphere to gain access to working capital and financing for expansion and growth. Funded facilities are extended by the bank in the form of term loans, bank guarantees, overdrafts, cash credit, bill discounts, and so on.
IDBI Bank Loan to Small Road and Water Transport Operators
Through the loan program, SMEs can purchase commercial vehicles. For this IDBI Bank loan, the maximum amount is Rs. 2 Crores. A loan of this kind can be used only to acquire new motor vehicles or water conveyance systems. Loans from the bank can be in the form of term loans, overdrafts, or bank guarantees
IDBI Loan SME against Commercial and Residential Properties
Getting a loan against property can help small businesses get funding for expansion. Under such a loan, businesses can borrow up to Rs. 5 Crores. It is perfect for businesses in the MSE sector seeking funds to grow and expand. Terms are typically 7 years. Loans of overdraft are expected to be repaid within 12 months
IDBI Bank Finance to Doctors and Medical Practitioners
From setting up a medical centre, assisted living facilities, hospitals, and diagnostic labs, among others, benefit from the capital requirements provided under this scheme. Loan amounts can reach up to Rs. 2 Crores. Medical practitioners with qualifications in a variety of fields may qualify provided that they have prior experience in the said fields. This loan can be obtained by Individuals, Partnerships, Limited Liability Companies, Trusts, and Companies. Qualifications included MBBS, BAMS, BDS, BHMS, etc.
IDBI Bank Vendor Finance Program
MSME manufacturers and suppliers can take advantage of this secured loan program. These loans can be arranged by the bank in a number of ways, including Overdraft (OD), Cash Credit, Letter of Credit, Bill Discounting, Finance against Invoices, and more. Vendors can depend on it for financial assistance during the production or post-production phases
IDBI Bank General Credit Card Loan Scheme
These loans are available to MSME businesses that do not operate in the agriculture sector. Loan amounts don’t exceed Rs. 5 Lacs. Those needing help with working capital and capital spending can apply for this scheme. This loan is available to all MSME businesses engaged in non-farm enterprise activities.
IDBI Bank Laghu Udyami Credit Cards
This scheme is based on your credit card which is offered by the bank to existing MSEs having been in good standing for over three years. Retailers, craftsmen, rural industries, SMEs, and self-employed business owners may also apply. Each applicant is limited to a loan amount of Rs. 10 Lacs. The funding is collateralized and is repaid within 3 years.
IDBI Bank Stand Up India Loan Scheme
It is intended to enable females and businesses in the minority segment to establish Greenfield projects. These can be manufacturing, service, or trading businesses. There is a loan limit of Rs. 1 Crore for this loan. For non-individual firms, no less than 51% of shares must be owned by women or people belonging to a minority group
IDBI Bank Mudra Loan Scheme
A loan like this is available to individuals without financial backing, proprietorships, corporations with small production plants, produce stands, food services, mechanics, SME’s, skilled trades, transporters, and so forth. The maximum amount available is Rs. 10 Lac. According to the size and type of business, there are three variants of the loan scheme: Shishu, Kishore and Tarun. Loan amounts vary according to the loan type chosen.
To know more details on SME loans from IDBI Bank. You can email [email protected] or call at +918886666821.
FAQ’s
In what ways are loans needed by businesses?
The loan for your business can be obtained for various reasons. Below are some of the most common reasons for taking out a business loan:
- Operating with more capacity
- Equipment and machinery acquisition
- Purchasing of raw materials and goods
- Enhancing working capital
- Build a better credit history
How can I check the status of my loan at IDBI Bank?
You can contact IDBI Bank customer service to find out the status of your business loan, or if you have an account, log in to your account to find out the status. Alternately, you can click the below link and enter your 12 digit LATS reference number to track your loan application status. https://www.idbibank.in/track-your-application.
Does IDBI support startup businesses?
There is an IDBI Bank program called Mudra Yojana that allows you to apply for a startup loan under this scheme.
Is there a correct method for calculating the EMIs of an IDBI business loan?
EMI calculators on their website can be used to calculate EMIs for IDBI business loans. It’s as simple as entering the required amount, rate of interest, and maturity date.
Is there a minimum interest rate for IDBI Bank business loans?
In accordance with the applicant’s profile and business requirements, IDBI bank offers varying interest rates on different schemes.
What criteria does IDBI use to determine how much I am eligible for?
A loan amount will be determined according to your repayment capacity that is accessed by IDBI Bank. When evaluating repayment capacity, factors such as financial status, age, possessions, financial obligations, work history, and saving records are all taken into account.
How can I repay the amount that I borrowed?
Repayment kicks in the month after you receive full payment. The outstanding loan amount and accumulated interest for the loan can be repaid in EMIs. Your choices are:
Set up a standing instruction to debit the EMI automatically.
Payments can be made through internet banking
Drop a cheque into the lending account with the bank.
You can also pay the EMIs in cash at any of their branches.
Is there a possibility for paying off the loan early?
Loan payments can be made ahead of schedule. After six months from the final disbursement, there is no prepayment or foreclosure fee assessed to the borrower
How soon does a business loan have to be repaid?
The duration of the loan will be determined by the terms of the loan. Prepaying does not require waiting until the end of the term. There is, however, a prepayment charge of around 2 percent for IDBI Bank.
When do business loans at IDBI have to be paid back?
Business loans from IDBI are available for a maximum of 60 years. To avoid late payment penalties for this loan, you must repay your loan within the loan tenure.
