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Commercial property loan interest rates in India

  • 21-Mar-2022
Commercial property loan interest rates in India

 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 
Loan Amount From Rs. 5 lakhs to Rs. 5 crores 
Repayment tenure Up to 15 years 
Processing fee Up to 1% of the loan amount  

Compare interest rates and Processing fees by Top banks in India 

Bank name  Interest rate  Processing fee 
Bandhan Bank Ltd. 9.00% 1% 
Bank of Baroda 8.00% 1% 
Aditya Birla Finance Limited 10.00% 1% 
Axis Bank Ltd 7.50% 1% 
Central Bank of India 10.10% 1% 
Canara Bank 11.70% 1% 
Axis Finance Limited 10.00% 1% 
Aavas Financiers Limited 13.00% 1% 
ICICI Bank Ltd. 7.75% 1% 
HSBC Bank 7.50% 1% 
Hero FinCorp Limited 9.00% 1% 
HDFC Bank Ltd 7.25% 0.50% 
HDB Financial Services Limited 10.00% 1% 
Deutsche Bank 7.50% 1% 
Digibank (DBS) 9.00% 1% 
Edelweiss Finance 10.00% 1% 
Federal Bank Ltd. 9.50% 1% 
DCB Bank Ltd. 9.00% 1% 
Punjab national bank 8.70% 1% 
Pnb Housing 9.00% 1% 
Indian bank 8.80% 1% 
Indiabulls 9.50% 1% 
IDFC First Bank 9.50% 1% 
IIFL 11.00% 1% 
LIC Housing Finance 8.00% 1% 
Union Bank of India 9.80% 1% 
State Bank of India 8.45% 1% 
RBL Bank Ltd. 8.50% 1% 

Benefits of Commercial Property Loan 

  • Tax benefits: - 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 

For individual: 

  • 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

Also read: - A Complete Guide on Commercial Property Loan in India

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