What is the working of Commercial Property Loan

Commercial property loan are credit options lenders offer against mortgage of a commercial property. It is a type of credit that gives you some of the best features and benefits of the lending market. Understand the concept of a loan on commercial property in details.

What are Commercial Property Loan?

A commercial or a real estate property is one that you use to run a business or any other commercial undertaking. As per the concept of loan on commercial property, you can avail it to purchase any commercial property where you aim to run a business or to renovate it.

Bajaj Finserv brings this credit option with modifications in existing conditions to benefit borrowers. So, if you already have a commercial property, you can easily mortgage it and avail a high-value loan amount with no end-use restriction.

Thus, Loan Against Property can be used to meet several big-budget financial requirements.

How Does a Loan on Commercial Property Work?

A commercial property loan is a type of Mortgage Loan that is secured through the mortgage of commercial property instead of residential property.

Bajaj Finserv provides this loan to borrowers at affordable mortgage rates of interest and charges, one of the lowest in the market. Flexible repayment tenors of up to 20 years makes it even more borrower-friendly.

You pay lower EMIs as the amortisation process used for calculation distributes the interest calculated as per the applicable Property Loan rates in a more extended number of months.

Bajaj Finserv’s commercial Property Loan also comes with Flexi Loan Facility that lets you withdraw the required money from a pre-sanctioned loan amount. You can opt to prepay at any time before the tenor ends.

Commercial property loan from Bajaj Finserv also requires you to meet mortgage eligibility criteria and documents to avail the same. Meet them and know how to apply for Loan Against Property to avail the same.

Documents Required for A Commercial Property Loan

Besides fulfilling the eligibility criteria for a commercial property loan, all applicants/co-applicants need to submit the following documents along with the duly filled and signed application form.

1. Proof of identity and residence

Individuals need to submit their KYC documents, such as PAN Card, Voter ID, driver’s license, passport, or any other government-issued document.

2. Proof of income

Applicants can submit the below documents as proof of income.

  • CA-attested ITRs along with the computation of income of the business as well as themselves for the previous three assessment years
  • Savings account and current account statements
  • CA-attested balance sheets and profit and loss statements for the past three years

 

3. Property-related documents

Property-related documents required for a commercial property loan include a copy of the allotment letter/buyer agreement as well as title deeds, which include the previous chain of property documents in resale cases.

4. Other documents

Here’s a list of other commercial property loan documents that individuals need to submit to complete the application procedure:

  • Business profile
  • Memorandum of Association and Articles of Association in case of a company
  • List of Chartered Accountants and Company Secretariats
  • Partnership deed (if the business entity is a partnership firm)
  • Details in relation to pre-existing loans of the applicants as well as the business entity, including instalments, outstanding amount, purpose, etc.
  • Proof of own contribution
  • Passport size photographs of all applicants/ co-applicants
  • Cheques drawn in favour of the loan provider to pay the processing fee
Note that an application can get cancelled if an individual fails to submit any of these documents. Hence, before applying for financial assistance, it is essential to ensure that all the documents mentioned above are available.

 

Commercial Property Loan Eligibility

Only self-employed individuals can apply for the commercial property loan. The applicants are further classified into two types, namely:

Self-employed Professional (SEP)
The following professionals come under this category:

  • Doctors
  • Chartered Accountants
  • Consultants
  • Architects
  • Lawyers
  • Company Secretaries, etc.
Self-employed Non-Professional (SENP)
Here are a few examples of SENPs:
  • Traders
  • Commission agents
  • Contractors, etc.
According to the commercial property loan eligibility criteria, SEPs and SENPs need to fulfil the following requirements:

 

  • Age: The age of an individual applying for this type of financial assistance must be between 25 to 70 years. The application stands to be cancelled if this eligibility criteria is not fulfilled.  
  • Stable income: It’s imperative for self-employed individuals to maintain a stable source of income. If the income proof documents fail to represent the same, the financial institution may cancel the application.  
  • Indian resident: Applicants must be residents of India to be eligible for a commercial property loan.

 

Before initiating the application procedure, it is essential for applicants/co-applicants to make sure that they meet the requirements. If they fail to do so, their application will get cancelled.

FAQ

What is the credit score required for commercial property loan?

In order to qualify for Commercial property loan, you should have credit score above 660. Rest you should contact with you lender too.