You can avail of a loan against a commercial property if you need urgent funds. You will get competitive interest rates and instant loan sanctions. You can get a loan of up to Rs. 5 cr or even higher if you meet the eligibility criteria. Availing of a loan against commercial property is an excellent cost-effective way to take care of your funding requirements. However, taking a large amount for a loan does not equal a higher interest rate. A loan against a commercial property provides highly competitive lending rates, and you can take loans without burning a hole in your pocket. The parameters for eligibility are direct and easy for you to avail of a loan against a commercial property. You can complete the verification and the entire process in a few days. The disbursal is speedy and convenient.

Read: LAP EMI Calculator

Benefits of Availing Loan Against A Commercial Property

Here are a few benefits of availing of loans against a commercial property:

Huge Loan Amounts

Your financial profile and needs can get you a loan up to Rs. 5cr or more. You can get a higher loan if you meet the lender’s eligibility criteria. Such a vast sum can help you address several issues and expenses.

Good Interest Rates

You get a loan once you keep your commercial property as collateral. The interest rates are attractive, and you get EMIs you can easily manage. The interest rates will depend on your eligibility and the lender’s policies. If everything goes well, you can secure a loan against commercial property with very low interest.

Collateral Type

The property you wish to keep as security must be registered in your name. You must be the owner of the property you wish to offer as collateral to get a loan against a commercial property. Commercial property can be a hotel, medical center, restaurant, commercial real estate, manufacturing shop, office building, grocery shop, or similar workspaces.

Factors Affecting Loan Against Commercial Property

You should factor in these three elements when you decide to get a commercial loan:

Tenure For Repayment

You get a significantly long payment tenure which lasts for years if you avail of a loan against commercial property. The tenure might extend to 18 years, making it comfortable for you to pay reasonable EMIs. You can use an online EMI calculator to calculate how much EMI you would have to pay in the case of a loan against commercial property.

Loan-To-Value Ratio (LTV Ratio)

The LTV ratio determines how much funding the borrower can get. Your lender will determine this amount by evaluating the property you have put up as collateral and considering its market value, amenities, infrastructure, build, etc.

Read: LAP Eligibility Criteria

Eligibility for Loan Against Commercial Property

Lenders have their own sets of criteria, and borrowers must fulfill them to be eligible for a loan. Some of these criteria are:

For Professional and Salaried Borrowers

The applicant must be an Indian resident, and their collateral property must be in the city where the lender has its branch office(s).
The ideal age of the borrower must be between 28 and 58. Loan maturity requires the calculation of the maximum age.
The borrower must have a minimum work experience of three years and be employed in a multinational firm, private or public sector.
The borrower’s preferred salary differs with the city but generally is around Rs. 25,000-35,000.

For Self-Employed Applicants

The applicant must be an Indian resident, and their collateral property must be in the city where the lender has its branch office(s).
The ideal age of the borrower must be between 25 and 70. Loan maturity requires the calculation of the maximum age.
The borrower’s preferred salary differs with the city but generally is around Rs. 25,000-35,000.

Read: LAP Documents Required

Required Documentation

Identity Proof: Driving license, voter ID, passport, Aadhar card, PAN card (any one).
Address Proof: Utility bills such as electricity bills, ration card, passport, voter ID, Aadhar card (any one).
Property Documents, including ownership and mortgage paperwork.
Form 60 and PAN Card

For Salaried Individuals:

A salaried individual must provide the following documents to avail of a loan against commercial property:

Employment Proof: ID card issued by the employer
Income Proof: Previous year’s income Tax return
Previous two months’ salary slips
Previous three months’ bank account statements

For Self-Employed Persons:

A self-employed individual must provide the following documents to avail of a loan against commercial property:

Employment Proof: Partnership agreement, business registration certificate, etc.
Income Proof: Previous two years’ Income Tax return
P&L statement of the company, balance sheet
Previous six months’ bank account statements

Conclusion

We use a commercial profit intending to earn profits, which is why you can receive a larger sum in a loan against commercial property. Use online tools like LAP eligibility or EMI calculators to assess and compare the different deals available to you.