IDBI Bank - SME Loan Against Property

IDBI Bank SME loan against property product aims to provide business loan against commercial and residential properties that are possessed by them. The final and end use of the loan would be for a variety of business related purposes or to handle any financial needs i.e., retiring of high cost debt, balance transfer or takeover or any other business needs and urgencies.

Eligibility Criteria

The following types of applicants are eligible for financing under the scheme:

Proprietorship involved in the business for the last three years
Partnership involved in the business for the last three years
Public limited companies involved in the business for the last 3 years
Private limited companies involved in the business for the last 3 years

Loan Amount & Type

The loan sanctioned under this scheme ranges from a minimum of Rs 5 lakhs to maximum of Rs. 5 crores. The loan can be provided as a term loan or as an overdraft facility. In case of term loan, repayment in regular payments over a set time period is expected. T

erm loans are offered for a maximum time period of 7 years and overdraft facility is offered for a maximum period of 12 months.

Interest Rate

The rate of interest of the loan is reflected by the interest rate linked to base rate of bank and rating of the borrower. Base rate is the minimal rate determined by the Reserve Bank of India and below this banks are not permitted to issue customer loans. A bank loan rating conveys the degree of risk with reference to timely payment of the bank facility under consideration of being rated. Additionally, processing charges of the loan are up to a maximum of 1% of the loan amount.

Collateral Security

Collateral security in the form of residential or commercial property is a must, a the loan is provided as loan against property. Collateral is defined as a property or any other asset that a borrower offers to a lender of credit to securitize a loan. In this case the collateral is the equitable mortgage/ registered mortgage of residential or commercial property. In addition to the collateral property, the loan requires the personal guarantees of the borrower.