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Know How to Avail Loan Against Commercial Properties Effortlessly

Availing a loan on a pre-owned property is not that of big a hassle today. But what seems to be an issue is the lack of required information to proceed with the necessary process. There are many individuals who look fora loan against commercial property and many lending institutions welcome them for the necessary financing.

But let us first discuss more about commercial properties and how they can be used to borrow money from lending institutions?

Any real estate property that is used for business activities such as hotels and resorts in the hospitality business, flats and bungalows for renting purposes, lands for cultivation and farming, buildings for teachings and other coaching classes, etc. are highly valuable in market. One can thus easily avail loan on such a property.

Is It Safe to Avail a Loan Against a Commercial Property?

Yes, it is very much safe to take such loans provided you hold stable finances and a suitable repayment capacity to meet EMI payments in time. These loans are not only offered at low interest rates but also come with some remarkable advantages. Some common benefits of these loans include –

  1. Borrower can still use the property for business activities after mortgaging.
  2. As interest rates are generally low, EMIs remain affordable as well.
  3. A borrower can pay EMIs easily as he/she earns from the property while it is still mortgaged.
  4. If needed, a borrower can seek additional funding against the same property via the existing lender if he/she holds the right repayment capacity.
  5. A borrower may choose a tenure for a maximum of 15 to 20 years for reduction in the EMIs.

Reasons to Avail a Loan on Commercial Property

Individuals mostly avail such loans to boost their existing business’s finances. There might be other circumstances as well like:

  • To compensate the expenses of a family wedding.
  • To reduce the burden of prior monetary debt.
  • Funding higher education.
  • A well-paid lavish trip to any overseas locale.

The documents required to availa loan against commercial property include the following.

  1. Accepted ID proofs like passport, Aadhaar card, PAN, etc.
  2. Proof of residence like Aadhaar card, driving license, voter’s identity card, electricity bill, telephone bill, rent agreement, water bill, gas passbook, bank’s passbook, passport, etc.
  3. Last 3 months’ salary slip for salaried individuals.
  4. IT returns filed.
  5. Bank account statements.
  6. Self-employed individuals like doctors, CA, engineers, etc. need to provide an audited financial statement by a CA or any such other entity.
  7. Possession of original property documents such as registration certificate, receipt of property tax, etc.

Steps to Avail Commercial Property Loan:

  1. Choose your preferred lender after a thorough research online or offline.
  2. Compare EMI rates and processing charges.
  3. Look for a lender who can reimburse the amount as soon as possible.
  4. Visit your lender’s office or their website to fill the loan application form.
  5. Read the terms and conditions thoroughly.
  6. Calculate EMIs on lender’s website.

Points to Remember before Applying:

  • Do not fill the form without reading it properly.
  • Do not seek a loan amount that exceeds your repayment capacity.
  • Ask your lender about foreclosure process and charges.
  • Try not to skip on EMIs.
  • If the property has more than one legal owner, their written consent is necessary to apply for a loan against the said property.
  • Try to keep a good credit score for future loan related purposes.

Availing a loan against commercial property is quite common these days. Any person endeavouring such loans can easily fill an online application form and submit to proceed with further loan processing. Make sure to fill in the required information correctly in your loan application form to experience a hassle-free loan processing.