We often consider applying for Loans to finance our big-ticket expenditures, and property investment is no different. While investing in a commercial property is for your business’s better future, it involves some financial stress. This is where Commercial Property Loans step in and help you inch closer towards achieving your dreams.

Commercial Property Loans offer financing at competitive rates, providing support throughout the entire process, from property hunting to Loan repayment. It provides you with the necessary funds through Loans to buy new or resale properties for business purposes. The Loan amount is sanctioned based on your eligibility, which is determined by factors like existing obligations, credit score, property type, income level, and individual documents. The commercial property that you wish to purchase acts as a security for the lender in this case.

Interest rates

Lending firms offer Loans which can be used to purchase commercial property. Their interest rates on LAP start from 13.50% per annum, which helps reduce the overall value of the EMIs payable. If you are an entrepreneur, lawyer, doctor or CA, the Loan for Commercial Property would be your proud funding partner in helping you acquire your ideal commercial real estate, taking you one step closer to achieving your goals.

Eligibility criteria

Eligibility for a Commercial Loan varies depending on whether you are salaried, self-employed, or an SME. You must be a resident Indian and own the property offered as collateral, ensuring it is free from legal issues. To apply, salaried professionals must be between 21 and 60 years old and employed by MNCs, listed public companies, or government entities.

The minimum monthly salary varies by city, and the CIBIL score requirement is 700+. Those working with closely held companies, partnerships, and proprietorship firms are also eligible. Businesspeople, sole proprietors, and other types of self-employed individuals are eligible to apply. Similarly, doctors, architects, and Chartered Accountants can also apply.

Eligibility requirements include being between 25 and 65 years old, having a minimum yearly income, a steady income source, and a CIBIL score of 700+. SMEs should be at least two years old, with steady profits over the tenure, and have audited financials. Joint owners of the property can apply as co-applicants if they meet the eligibility criteria and provide the necessary documentation.

Tax benefits

Tax benefits on Loans for Commercial Property primarily relate to the type of property and how the Loan is utilised. Deductions can be claimed for property tax paid (Section 24(a)) and expenses on repairs and maintenance (Section 30). The rental income taxation falls under ‘Income from House Property,’ with deductions for municipal taxes and a standard deduction. However, principal repayment of a Loan for Commercial Property purchase or construction is not directly deductible.

Moreover, under Section 37(1), if the Loan is used exclusively for business expenses, interest paid and related fees are tax-deductible, reducing business profit. This does not apply to capital expenditures.

Conclusion

Lenders offer flexible repayment tenures up to 20 years, allowing you to select a repayment period and corresponding EMI that comfortably fits within your budget. The Loan amount is credited to your account shortly after your application is sanctioned and your documents are verified, which typically takes 15 to 20 days.