Products offered by different nbfc in India

Commercial Car Loan

Purpose of a Commercial Vehicle Loan
As stated above, commercial vehicle loans are availed to fund the purchase of a vehicle that
will generally be used for commercial or business purposes. These loans are offered by
leading lenders in the country such as ICICI Bank, YES Bank, Indiainfoline, Mahindra Finance,
etc., at affordable interest rates. The entire process of commercial vehicle loan application is
swift, hassle-free, and requires less paperwork.

Features of Commercial Vehicle Loans

• You can get a commercial vehicle loan at a low interest if your profile matches with the
criteria put forward by the lenders.
• The processing time of a commercial vehicle loan is fast with easy documentation and
approval.
• Most of the prominent banks in India provide commercial vehicle loans at affordable rate
of interest without any security.
• Some of the banks assign a personal relationship manager from starting till procurement
of the vehicle. He/she will do all documentation and address every issue related to the
loan.
• Once all required documents are submitted, it takes around 7 days for the disbursal of the
loan amount.

Types of Commercial Vehicle Loans

Commercial loans can be availed for a variety of commercial vehicles which are used at
different places to serve various purposes. Based on the type of vehicles these loans are
sought for, commercial vehicle finance is differentiated in three broad categories, namely:
1. New commercial vehicle loan
This type of commercial vehicle loan is provided to the customers for the purchase of new
commercial vehicles for business purpose. Banks offer up to 100% funding on the chassis
or base frame value of the vehicle. Some of the banks provide additional funding for the
body construction of the vehicles in selective cases based on the borrower’s profile.
2. Old commercial vehicle loan
Old or used commercial vehicle loan are those loans which are offered to purchase all
makes of pre-owned or used commercial vehicles. Under this loan, borrowers can expect
to get finance against old vehicles which are up to 15 years old. Most of the banks provide
up to 90% funding on the used vehicle’s value or depreciation grid value.
3. Commercial vehicle refinancing
Under commercial vehicle refinancing, banks either offer loan on an existing vehicle which
is free of loan or take over an existing commercial vehicle loan and provide additional
finance for it based on eligibility. While some borrowers can reduce the monthly EMIs of
their existing loan and free up some cash by refinancing an existing loan at lower interest
 rates, some others can get direct finance on their free vehicles to meet the working
capital needs.

Benefits of a Commercial Vehicle Loan

Commercial vehicle loan stands out to be the most preferred option for borrowers who are
either intending to buy their first commercial vehicle or planning to add a new vehicle to
their existing fleet of commercial vehicles due to the plethora of benefits that it offers.
Some of the amazing benefits offered by these type of loans are as follows:
• Flexible repayment tenure- Usually, the repayment tenure offered in commercial car loan
is up to 5 years. This ensures low EMI amount to the borrowers enabling them to pay off
the EMIs without any undue financial burden.
• Multiple vehicle financing- Whether you are an individual borrower or a fleet owner, you
can get finance for a variety of vehicles such as tippers, trucks, buses, trailers, tankers,
and other small and light commercial vehicles to grow your business.
• Easy processing- The process of applying for a commercial vehicle loan is easy, fast and
convenient. After the submission of all the required documents, banks usually take 4-5
days to process a new or used vehicle loan application.
• Simple documentation- Commercial vehicle loans come with a hassle-free and quick
documentation process. The users can easily upload all the mandated documents online
without visiting the bank directly.
• No credit-score compulsion- Unlikely other loans, commercial vehicle loans don’t require
any existing credit score. Borrowers having low or even zero credit score can avail a
commercial vehicle loan with ease.
• Caters to multiple needs: The loan schemes are designed to cater to the borrowers’
diverse requirements including new and used vehicle financing, top up on existing loan
and refinancing of loans/vehicles for working capital.
• Customised solutions: In order to meet the specific requirements of the customers, every
commercial vehicle loan scheme is customised according to the vehicle type, loan
duration and financial ability of each individual borrower.
What is retail finance?
In simple terms, retail finance is the provision of consumer credit at the point of
purchase/checkout. Rather than leaving the customer to seek external finance, or
make use of a credit card, a retailer incorporates a credit administration system
into the customer journey. This can either be done in-house, or by integrating
with a third-party lender which specialises in delivering POS finance.
Retail finance usually comes in the form of interest-free credit, interest-bearing
loans or ‘buy now, pay later’ arrangements. There are a number of other
variations too. For example, some retailers offer interest-free credit which
includes initial payment holiday periods (also known as ‘deferred interest-free
credit’). There are also other alternatives which are specifically geared towards
smaller/larger amounts of credit, and/or with shorter/longer payment terms for
the credit agreement.
As a retailer, your initial thought may well be that offering such credit facilities
will eat into your margins. However, as a wide range of research demonstrates,
the gains in terms of conversion, upsell and customer loyalty simply dwarf this
upfront cost, and it is thus no surprise that, in 2017, POS finance accounted for
over 1.5 per cent of all retail sales in the UK – equating to year-on-year growth of
9 per cent (source: Apex Insight)
 What are loan against securities (LAS)?
Loan against securities is a loan where you pledge your shares, mutual funds or life insurance policies as
collateral to the bank against your loan amount.

How do loans against securities work?

Loan Against Securities are typically offered as an overdraft facility in your account after you have
deposited your securities. You can draw money from the account, and you pay interest only on the loan
amount you use and for the period you use it.

For example, you are offered a loan against shares of Rs 2 lakhs. Let’s say, you draw Rs 50,000 and
deposit the amount back in your account in one month. In this case, you are liable to pay interest only for
one month on Rs 50,000.

The amount of loan you are eligible for depends on the value of the securities you offer as collateral

What is digital loan against securities?

A pathbreaking new product in this space is HDFC Bank’s Digital LAS, which automates and significantly
speeds up the process of getting a loan against shares in just 3 simple steps. Thanks to Digital LAS, you
can now get a loan in less than 3 minutes . The process is completely online, and you don’t even have to
step out of your office or home.

1. Login to HDFC Bank NetBanking, and choose the shares to pledge

2. Accept agreement through a one-time password (OTP)

3. Pledge shares with National Securities Depository Limited (NSDL) & Central Depository Services Limited
(CDSL) online by confirming OTP

Benefits of Digital Loan Against Securities

•
o Instant disbursal if you apply via NetBanking
o Pay interest only on the amount you use
o Low-interest rate and processing charges
o Set your own loan limits (minimum Rs 1 lakh and maximum Rs 20 lakh)
o No need to submit any documents
o Choose the shares and mutual funds you want to pledge, and enjoy the flexibility to change them in the
future
o No prepayment penalty
o High loan to collateral value
What Is Project Finance?
Project finance is the funding (financing) of long-term infrastructure, industrial
projects, and public services using a non-recourse or limited recourse financial
structure. The debt and equity used to finance the project are paid back from the
cash flow generated by the project.

Project financing is a loan structure that relies primarily on the project's cash flow for
repayment, with the project's assets, rights, and interests held as
secondary collateral. Project finance is especially attractive to the private sector
because companies can fund major projects off-balance sheet.

Not all infrastructure investments are funded with project finance. Many companies
issue traditional debt or equity in order to undertake such projects.
Understanding Project Finance
The project finance structure for a build, operate and transfer (BOT) project includes
multiple key elements.

Project finance for BOT projects generally includes a special purpose

vehicle (SPV). The company’s sole activity is carrying out the project by
subcontracting most aspects through construction and operations contracts. Because
there is no revenue stream during the construction phase of new-build projects, debt
service only occurs during the operations phase.

For this reason, parties take significant risks during the construction phase. The sole
revenue stream during this phase is generally under an offtake agreement or power
purchase agreement. Because there is limited or no recourse to the project’s
sponsors, company shareholders are typically liable up to the extent of their
shareholdings. The project remains off-balance-sheet for the sponsors and for the
government.

Off-Balance Sheet
Project debt is typically held in a sufficient minority subsidiary not consolidated on
the balance sheet of the respective shareholders. This reduces the project’s impact
on the cost of the shareholders’ existing debt and debt capacity. The shareholders
are free to use their debt capacity for other investments.

To some extent, the government may use project financing to keep project debt and
liabilities off-balance-sheet so they take up less fiscal space. Fiscal space is the
amount of money the government may spend beyond what it is already investing in
public services such as health, welfare, and education. The theory is that strong
economic growth will bring the government more money through extra tax revenue
from more people working and paying more taxes, allowing the government to
increase spending on public services.

KEY TAKEAWAYS

• Project finance is the funding (financing) of long-term infrastructure, industrial

projects, and public services using a non-recourse or limited recourse financial
structure.
• A debtor with a non-recourse loan cannot be pursued for any additional
payment beyond the seizure of the asset.
• Project debt is typically held in a sufficient minority subsidiary not
consolidated on the balance sheet of the respective shareholders (i.e., it is an
off-balance sheet item.)
What Is an Unsecured Loan?
An unsecured loan is a loan that is issued and supported only by the borrower’s
creditworthiness, rather than by any type of collateral. Unsecured loans—sometimes
referred to as signature loans or personal loans—are approved without the use of
property or other assets as collateral. The terms of such loans, including approval
and receipt, are therefore most often contingent on the borrower’s credit
score. Typically, borrowers must have high credit scores to be approved for certain
unsecured loans. A credit score is a numerical representation of a borrower’s ability
to pay back debt and reflects a consumer’s creditworthiness based on their credit
history.

KEY TAKEAWAYS

• An unsecured loan is supported only by the borrower’s creditworthiness,

rather than by any collateral, such as property or other assets.
• Unsecured loans are riskier for lenders than secured loans; as a result, they
come with higher interest rates and require higher credit scores.
• Credit cards, student loans, and personal loans are examples of unsecured
loans.
• If a borrower defaults on an unsecured loan, the lender may commission a
collection agency to collect the debt or take the borrower to court.
How an Unsecured Loan Works
An unsecured loan stands in contrast to a secured loan, in which a borrower pledges
some type of asset as collateral for the loan. The pledged assets increase the lender’s
“security” for providing the loan. Examples of secured loans include mortgages or car
loans. Unsecured loans, because they are not backed by pledged assets, are riskier
for lenders, and, as a result, typically come with higher interest rates. Unsecured
loans also require higher credit scores than secured loans. In some instances lenders
will allow loan applicants with insufficient credit to provide a cosigner, who can
take on the legal obligation to fulfill a debt should the borrower default, which
occurs when a borrower fails to repay the interest and principal payments of a loan
or debt.

Types of Unsecured Loans

Unsecured loans include credit cards, student loans, and personal loans—all of
which can be revolving or term loans.

• A revolving loan is a loan that has a credit limit that can be spent, repaid, and
spent again. Examples of revolving unsecured loans include credit cards and
personal lines of credit.
• A term loan, in contrast, is a loan that the borrower repays in equal
installments until the loan is paid off at the end of its term. While these types
 of loans are often affiliated with secured loans, there are also unsecured term
loans.
• A consolidation loan to pay off credit cards or a signature loan from a bank
would be considered an unsecured term loan.

There’s ample data to suggest that the unsecured loan market is growing, powered
partly by new financial technology. The past decade has seen the rise of peer-to-peer
lending (P2P) via online and mobile lenders, which coincides with a sharp increase in
unsecured loans. In its “Q4 2018 Industry Insights Report,” TransUnion found
that fintechs (short for financial technology firms) accounted for 38% of unsecured
personal loan balances in 2018, up from just 5% in 2013. Banks and credit unions saw
a decline in shares of personal loan balances in the same period
What Is Trade Finance?
Trade finance represents the financial instruments and products that are used by
companies to facilitate international trade and commerce. Trade finance makes it
possible and easier for importers and exporters to transact business through
trade. Trade finance is an umbrella term meaning it covers many financial products
that banks and companies utilize to make trade transactions feasible.

KEY TAKEAWAYS

• Trade finance represents the financial instruments and products that are used
by companies to facilitate international trade and commerce.
• Trade finance makes it possible and easier for importers and exporters to
transact business through trade.
• Trade finance can help reduce the risk associated with global trade by
reconciling the divergent needs of an exporter and importer.
How Trade Finance Works
The function of trade finance is to introduce a third-party to transactions to remove
the payment risk and the supply risk. Trade finance provides the exporter with
receivables or payment according to the agreement while the importer might be
extended credit to fulfill the trade order.

The parties involved in trade finance are numerous and can include:

• Banks
• Trade finance companies
• Importers and exporters
• Insurers
• Export credit agencies and service providers

Trade financing is different than conventional financing or credit issuance. General

financing is used to manage solvency or liquidity, but trade financing may not
necessarily indicate a buyer's lack of funds or liquidity. Instead, trade finance may be
used to protect against international trade's unique inherent risks, such as currency
fluctuations, political instability, issues of non-payment, or the creditworthiness of
one of the parties involved.

Below are a few of the financial instruments used in trade finance:

• Lending lines of credit can be issued by banks to help both importers and
exporters.
• Letters of credit reduce the risk associated with global trade since the buyer's
bank guarantees payment to the seller for the goods shipped. However, the
buyer is also protected since payment will not be made unless the terms in
 the LC are met by the seller. Both parties have to honor the agreement for the
transaction to go through.
• Factoring is when companies are paid based on a percentage of their accounts
receivables.
• Export credit or working capital can be supplied to exporters.
• Insurance can be used for shipping and the delivery of goods and can also
protect the exporter from nonpayment by the buyer.

Although international trade has been in existence for centuries, trade finance
facilitates its advancement. The widespread use of trade finance has contributed to
international trade growth.

"Some 80 to 90 percent of world trade relies on trade finance..." – World Trade

Organization (WTO)

How Trade Financing Reduces Risk

Trade finance can help reduce the risk associated with global trade by reconciling the
divergent needs of an exporter and importer. Ideally, an exporter would prefer the
importer to pay upfront for an export shipment to avoid the risk that the importer
takes the shipment but refuses to pay for the goods. However, if the importer pays
the exporter upfront, the exporter may accept the payment but refuse to ship the
goods.

A common solution to this problem is for the importer’s bank to provide a letter of
credit to the exporter's bank that provides for payment once the exporter presents
documents that prove the shipment occurred, like a bill of lading. The letter of
credit guarantees that once the issuing bank receives proof that the exporter shipped
the goods and the terms of the agreement have been met, it will issue the payment
to the exporter.

With the letter of credit, the buyer's bank assumes the responsibility of paying the
seller. The buyer's bank would have to ensure the buyer was financially viable
enough to honor the transaction. Trade finance helps both importers and exporters
build trust in dealing with each other and thus facilitating trade.

Trade finance allows both importers and exporters access to many financial solutions
that can be tailored to their situation, and often, multiple products can be used in
tandem or layered to help ensure the transaction goes through smoothly.
Other Benefits to Trade Finance
Besides reducing the risk of nonpayment and non-receipt of goods, trade finance has
become an important tool for companies to improve their efficiency and boost
revenue.
Improves Cash Flow and Efficiency of Operations
Trade finance helps companies obtain financing to facilitate business but also it is an
extension of credit in many cases. Trade finance allows companies to receive a cash
payment based on accounts receivables in case of factoring. A letter of credit might
help the importer and exporter to enter a trade transaction and reduce the risk of
nonpayment or non-receipt of goods. As a result, cash flow is improved since the
buyer's bank guarantees payment, and the importer knows the goods will be
shipped.

In other words, trade finance ensures fewer delays in payments and in shipments
allowing both importers and exporters to run their businesses and plan their cash
flow more efficiently. Think of trade finance as using the shipment or trade of goods
as collateral for financing the companies growth.

Increased Revenue and Earnings

Trade finance allows companies to increase their business and revenue through
trade. For example, a U.S. company that can land a sale with a company overseas
might not have the ability to produce the goods needed for the order.

However, through export financing or help from private or governmental trade

finance agencies, the exporter can complete the order. As a result, the U.S. company
gets new business that it might not have had without the creative financial solutions
that trade finance provides.

Reduce the Risk of Financial Hardship

Without trade financing, a company might fall behind on payments and lose a key
customer or supplier that could have long-term ramifications for the company.
Having options like revolving credit facilities and accounts receivables factoring can
not only help companies transact internationally but also help them in times of
financial difficulties.