Three insiders on the deal - which would involve a total of ten banks - have confirmed the plans to news agency Bloomberg.
ABN Amro, Barclays Capital and Bank of America are all set to lend money to the metals firm, which is to have a repayment period of five years.
The credit crunch has been blamed for the loan plans, with many Asian firms finding less and less value in selling bonds than they did prior to the global market volatility.
Hindalco's balance sheet has also been stretched by its recent $6 billion takeover of aluminium producers Novelis.
The firm took on a total of $2.4 billion of debt in the acquisition, which was completed in May 2007.
It also borrowed a loan of $3.03 billion to fund the buyout, which matures in December this year.
Hindalco - which has yet to comment on the deal - is the largest producer of non-ferrous metals in India.