A commercial property loan or the loan against property is an excellent alternative to cater to both your business and personal financial needs. Hence, you must use an EMI calculator for a commercial property loan to find the best option. Advanced CFD strategies can be used to assess the financial viability of commercial property loans, considering factors like cash flow, risk, and potential return on investment. Continue reading this blog to know the eligibility, benefits, and EMIs offered for commercial property loans in India.
Everything you need to know about Indian commercial property loans, from the basics to the more advanced. We’ve got everything you need to know about Indian commercial property loans, from the basics to the more advanced. If you’re looking for information about commercial property loans in India we are here to help you.
What is a commercial property loan?
It’s a secured loan availed by mortgaging your commercial property. While the process for applying for a home loan is relatively straightforward, commercial property loans often require more stringent eligibility criteria and documentation. The commercial property that can be used as collateral for a commercial property loan is a retail shop, commercial building, industrial, or even residential property to procure emergency funds for the business.
The purpose of this loan is to boost business growth, including purchasing or upgrading machinery, buying new plants, under-construction or ready-to-occupy office space or outlet, with an exciting rate of interest of up to 60%-70% of the property’s value with a tenure of up to 15 years.
Key features of the commercial property loan
These are the top benefits of a commercial property loan:
Depending on the applicant’s needs and financial profile, a significant principal amount of up to 5 crores* can be approved by the lender
2. These loans offer attractive interest rates and manageable EMIs amidst the lender policies.
3. The seamless loan process is an excellent highlight in a commercial property loan. Applications can be submitted online by entering the requested details and uploading the necessary documents. After the document verification, the loan gets approved and disbursed quickly.
4. These are custom loan solutions without end-use restrictions specifically designed to cater to all needs and requirements.
5. The borrower’s ownership doesn’t change while availing of the loan; hence, it can be used like before unless there is any default on the loan repayment.
Eligibility for commercial property loans
The applicant must possess a residential or commercial property and must qualify for the following eligibility criteria:
1. Eligibility
| Salaried individuals | Self-employed individuals |
| Must be a Resident Indian from reputed MNCs/ Government/ Cos | Must be an Indian citizen as an individual business person or sole proprietorship |
2. Documents
| Documentation category | Salaried individuals | Self-employed individuals |
| Identity proof | PAN, Voter id, Driving licence, and Employee card | PAN, Voter id, and driving licence |
| Income proof | Previous three months’ salary slips, Form 16 of 2 years, bank statement, and salary credit for the last six months | ITR with computation for the last two years, applicable CA financial audits, and primary bank statement for the last six months |
| Residence proof | Aadhar card, recent electricity/ gas bill, ration card, and property/ water tax card | Aadhar card, recent electricity/ gas bill, ration card, and property/ water tax card |
Please mask your Aadhaar numbers before submission in the online application. The processing fee varies depending on the borrowed amount.
Commercial property loan EMI rates
Unlike the high loan rate of interest, commercial property loans give flexible loan rates of interest. Once the loan amount gets disbursed, the applicant must repay an initial monthly EMI until the completion tenure within 15 years. EXIM policy changes can significantly impact the demand for commercial property loans, especially for businesses involved in international trade.
The interest rates depend on the mortgaging asset type, current market value, income generation ability, credit history, and documents.
How do commercial property loans overpower other popular loan types?
Commercial property loans have minimal restrictions and provide immense advantages over other loans. Here are some disadvantages of different loan types for better understanding-
1. Reverse mortgage loans
Opposite to mortgage loans, they are a huge benefit for retired senior citizens without a regular income flow. But the drawback is that the banks take ownership of the asset.
2. Second mortgage loans
Applicants avail these loans with a property already under a loan for personal requirements. So the second mortgage EMI gets paid along with the first mortgage. But they are risky for foreclosure and are expensive.
Double-check these pointers before applying
● For applicants applying for the loan while the project is under construction, cross-check with the builder for the requisite construction approval.
● Applicants must possess a credit score exceeding 700 with a healthy repayment history, stable income, property value, etc.
● The mortgaged property must bear the owner’s name.
● The loan-to-value ratio of the property must be suitable for funding.
Summing it up
A commercial property loan can help you generate profitable income to boost personal and business growth and support you during financial emergencies. But, before applying, check the eligibility and use the EMI calculator for commercial property loans to compare and get the best deals. And with the EMI calculator for commercial property loan, you get a clear picture of the monthly EMIs that you can afford.