A commercial property loan is a loan that one avails to get funds by mortgaging a commercial real estate owned by the applicant. If you are looking to expand your business, buy an expensive machine, or do more things, you can avail of a commercial loan. However, you have to first learn how do commercial real estate loans work and their eligibility criteria. Let me share the steps I followed when I availed of a commercial loan.
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How do commercial loans work?The commercial loan works in certain steps like
Collateral-To get a commercial property loan, the applicant must first mortgage a self-owned commercial property. That can be an office building, a manufacturing shop, a grocery store, or more.
Loan amount-The commercial property loan to value determines the amount of money you can obtain. For example, if your property is Rs 2 crore and the loan to value is 50%, you can get a loan worth Rs 1 crore. The loan-to-value rate remains usually between 60-75%.
Repayment-A commercial property loan is usually given for a maximum period of 18 years. You will have to ask the lender about the rate and calculate your EMI as per it.
This is the process of disbursing the loan.
What are the eligibility criteria for availing of a commercial loan?There are certain requirements that you need to meet before availing of a commercial real estate loan and they are-
The applicant must be an Indian citizen
He/she must be between the age bracket as mentioned by the bank or lender
The applicant must have a commercial property that is free of any legal dispute
He/she must have a steady source of income
Lastly a CIBIL score of minimum 650 plus should be maintained
This answer must have already given you an idea of how do commercial real estate loans work.
Read More:Can I get business loan to buy commercial building?
Can I get business loan for buying commercial place?
How to qualify for a commercial real estate loan ?
What is a commercial construction loan ?
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How do Commercial Real Estate Loans Work?
Jagdeep
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2023-03-21T10:39:54+00:00 2023-03-21T11:00:48+00:00Comment
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