A commercial property loan is a form of secured loan. It is a credit option that banks offer against the pledge of commercial property. It is used to run a business. If the borrower wants to buy a commercial property, he can get a maximum of up to 85% of the project cost as a loan amount at an attractive rate of interest. It is offered by various Banks, financial bodies, and NBFCs in India.
The interest rate of commercial property loans
Rate of interest
7.25% Onwards per annum
From Rs. 5 lakhs to Rs. 5 crores
Up to 15 years
Up to 1% of the loan amount
Compare interest rates and Processing fees by Top banks in India
Bandhan Bank Ltd.
Bank of Baroda
Aditya Birla Finance Limited
Axis Bank Ltd
Central Bank of India
Axis Finance Limited
Aavas Financiers Limited
ICICI Bank Ltd.
Hero FinCorp Limited
HDFC Bank Ltd
HDB Financial Services Limited
Federal Bank Ltd.
DCB Bank Ltd.
Punjab national bank
IDFC First Bank
LIC Housing Finance
Union Bank of India
State Bank of India
RBL Bank Ltd.
Benefits of Commercial Property Loan
Taxbenefits: - While buying a commercial property, an applicant should enjoy several tax benefits. If he acquires a loan for buying a property, he can also get the deduction on tax for the interest payable on EMIs.
Easy management: - Organizations such as IT Companies, retail outlets, Banks, etc. rent office space. These establishments are professionals so, it becomes easier for the owners of a commercial property to manage with the holders.
Renting potential: - If the borrower has space in their property that is unused, then he may generate income from it.
Interest rate: - Rate of interest of commercial property loan begins from 7.45% p.a. It is the affordable funding option because of the higher competition among the financial institutions, or banks.
Loan up to 80%: - The borrower can avail of commercial property loans ranging from Rs. 5 lakhs to Rs. 5 crores for a flexible tenure of a maximum of up to 15 years.
Documents required for Commercial Property Loan
Passport-sized photographs of all the directors
Permanent address proof and also required if rented
Identity proof: - Copy of PAN Card and Passport
Address proof: Directors and company
GST return of 1 year.
A Cheque for processing fee (In Favour of bank)
Clear PAN Card of company and all the directors
Complete property documents with Map and Chain + ATS.
Sanction letter and loan schedule
Bank statement of last 1 year for salary account
ITR with computation of income for last 3 years form – 16 (if file)
List of all directors and shareholders with Chartered accountant certified as of date.
VAT, SALE, SSI, and GST registration certificate.
Eligibility criteria for Commercial Property loan
Eligibility criteria for commercial property loans depend on several factors such as monthly salary, age of an applicant, or business income of co-applicant and residency.
The Age limit of an individual is in between 22 to 65 years of age.
CIBIL Score must be above 700
The financial statement should be positive.
Nationality – Resident of Indian
Factors affecting Commercial Property Loan There are various factors that affect Commercial property loan
Loan amount: - High loan amount for the longer loan term makes it easy to pay back the loan as the amount of EMI becomes low.
Loan tenure: - Longer terms scatter the payment for a longer period. If the borrower has sufficient income, he should choose for a longer tenure and that will increase the chances of success.
CIBIL Score: - CIBIL Score plays a vital role, an applicant must have a credit score of at least 750.
The borrower’s age: - An applicant has a crucial impact on him to pay back the debt.
Therefore, planning to get a commercial property loan to compare banks' and NBFCs interest rates to get the best rates on loans. Apply through financeseva.