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Commercial Property Loan: Everything You Need To Know
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Like a home loan is meant to purchase residential property, the loan for commercial property is meant to purchase commercial property. When it comes to buying space for the first office, expansion of branches, or just investing in commercial real estate for rental income, the commercial property loan is the best choice. Like another loan application, one must take the appropriate steps and sufficient research before one makes a decision to apply for this loan. In order to aid you in this process, we have provided information that you must know about this loan.
For what can the commercial property loan be availed for?
The purpose of a loan for commercial property is solely used for the purchase of commercial property. Most financial institutions provide a loan amount of at most 85% of the value of the property in the commercial loan. However, the applicant must first demonstrate the ability to repay the loan. One can apply for this to:
• Purchase property within a commercial development which is under-construction
• Purchase a ready commercial property
• Purchase a plot in a private development. One can also make this purchase from the current owner or from a government development authority.
• Finance the construction of a commercial building on your own plot.
• Purchase plot and financing the construction of commercial property on it.
When can one apply for this loan?
An applicant may apply for the loan for commercial property, once he has selected the appropriate commercial property. If the applicant has not yet selected a property, he can approach a financial institute that offers a pre – approved loan program, wherein one can get the loan pre- approved even before the property is selected. However, in such a case, the applicant must validate his ability to repay the loan along with the interest.
What is the eligibility criteria for this loan?
Like any other loan, there are certain criteria’s that must be satisfied by the applicant before he gets the approval for the loan. Most financial institutes often have their own personalized criteria, but most of them follow a standard guide. Some of them include:
• Sufficient income
• Nature and tenure of employment and profession
• Applicant’s credit history
• Applicant’s current credit history in terms of other EMIs or credit cards.
• The history and value of commercial property that the applicant has selected. The credibility of the property and the developer will also be taken into consideration.
Having a Co-Applicant to your Commercial Property Loan
In order to improve your credibility and increase your chances of approval at the loan, one can apply for a co – applicant on the loan. One can chose from family, to stand as a co – applicant for the loan, as long as the selected individual satisfies the criteria of the loan eligibility.
Author Bio :
Aishwarya Mahurkar is an experienced writer concerning the finance industry. Her articles help in informing her readers of the different types of home loan products such as Home improvement / renovation loan, commercial property loan.
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