Term Loan

A term loan is designed for long-term business investments such as expansion, equipment purchases, or infrastructure development with repayment periods typically ranging from 1-10 years. Working capital loans, on the other hand, are intended for short-term operational expenses like inventory, payroll, or managing cash flow gaps, with tenures generally under 1-3 years. Term loans usually offer higher amounts and fixed repayment schedules, while working capital loans provide more flexibility for day-to-day business operations.

Our term loan approval process typically takes 5-7 business days from the submission of all required documentation. For loans above ₹5 Crore or those requiring complex collateral evaluation, the process may extend to 10-14 days. We provide an in-principle approval within 3 business days for most applications. Once approved, the disbursement typically happens within 3-5 business days after completion of all documentation and compliance requirements.

Collateral requirements for term loans vary based on the loan amount, your business profile, and credit history. Typically, for loans above ₹50 Lakhs, we require collateral that may include:

- Commercial or residential property - Plant and machinery - Fixed deposits - Marketable securities

The collateral value generally needs to cover 100-125% of the loan amount. For established businesses with strong financials, we may offer reduced collateral requirements. Equipment term loans might only require the financed equipment as collateral.

Yes, you can prepay your term loan partially or fully before the end of the tenure. For partial prepayments, you can prepay up to 25% of the outstanding principal once in a financial year without any prepayment charges after completing 12 months from the first disbursement. For full prepayment, a prepayment charge of 2-3% of the outstanding amount may apply if done within the first 2 years of the loan tenure. After 2 years, this charge is reduced to 1-2%. These terms may vary based on your specific loan agreement and relationship with us.

Interest rates for term loans are determined based on multiple factors including:

- Your business's financial health and cash flow - Credit history and credit score of the business and promoters - Loan amount and tenure - Quality and value of collateral provided - Industry sector and associated risks - Overall banking relationship

We offer both floating and fixed interest rate options. Floating rates are linked to our reference rate and may change periodically, while fixed rates provide stability in EMI amounts throughout the loan tenure.

Yes, we offer moratorium periods on principal repayment for certain types of term loans, particularly for projects that require a gestation period before generating revenue. The moratorium period typically ranges from 3 to 12 months depending on the nature of the project and business requirements. During this period, you would only pay the interest component, with principal repayments starting after the moratorium ends. This option is generally available for expansion loans, project finance, and other specialized term loan products where there's a clear implementation timeline before revenue generation.