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    Loans for Commercial Shop Purchases

    Financial instruments such as loans has made our lives so much easier in the last decade. A loan makes it possible for us to achieve our dreams, be it purchasing your dream car or a house. Banks have launched new loan schemes over the years to suit the financial needs of its customers and one such loan is loan for commercial shop purchases. This loan offers finances to an individual who wants to purchase a commercial property to set up their shop or business. Read on to know more about Loan for commercial shop purchases in India.

    Difference between Loan for Residential Property purchase and Commercial shop purchase

    There are quite a lot of differences between loans for residential property purchase and loans for commercial property purchase in India. Listed below are the major differences between the two.

    • LTV ratio- LTV ratio or loan-to-value ratio describes the ratio of the loan to the value of the property purchased. While for residential properties, the LTV ratio is around 75-85%, for commercial properties, the ratio is much lesser at 55%.
    • Rate of interest- The rate of interest is higher for commercial property loans when compared to residential property loans.
    • Loan tenure- The maximum loan tenure for commercial properties is usually restricted to 10 years while the loan tenure offered for residential properties can go up to 25-30 years.
    • Processing fee- The processing fee charged for commercial property loans is much higher when compared to the processing fee for residential property loans. The usual processing fee for residential property loans is capped at Rs.10,000 while the standard processing fee for commercial loans is 1% of the loan amount.

    Loans for purchase of Commercial Shops/Properties in India

    Listed below are some the popular loans that offers finance for purchase of commercial shops/properties in India:

    Indian Bank My Own Shop loan

    Indian Bank offers a loan option designed specifically for those who need finance to purchase a commercial property to set up their shop. One can utilise the loan amount to purchase a new or a second hand commercial space. The loan is available to salaried employees, professionals, and self-employed individuals. The scheme offers a maximum loan amount of Rs.50 lakh for a maximum repayment period of 120 months.

    ICICI Bank Office Premises loan

    ICICI Bank Premises Loan offers finance for the purchase, construction, and renovation of office premises. The loan is available to self-employed professionals and non-professionals. The loan amount ranges between Rs.8 lakh to Rs.3 crore. One can apply for the loan online or at the ICICI bank.

    Apply for Personal Loan

    PNB Housing Commercial Property loan

    PNB Housing Commercial Property loan, as the name suggests is for purchase/construction of office spaces and shops. The loan is available to self-employed professionals/non-professionals, salaried employees, partnership firms, and corporate entities. Maximum finance granted is 70% of the purchase price of property or loan eligibility, depending on whichever is lower. The loan eligibility of the applicant will be determined based on his/her age, income, qualification, and occupation among other things.

    HDFC Non-residential premises loan

    The HDFC Non-residential premises loan offers finance for the purchase of a new or existing office or clinic. The loan can also be utilised for the extension, renovation or improvement of an existing office. It is available to self-employed professionals and non-professionals. The maximum loan amount granted is subject to market value of the commercial property and repayment capability of the applicant. The schemes offers an attractive rate of interest along with flexible tenure.

    It is very important to do your research before choosing a loan for commercial shop purchase. Though this kind of loan is much more expensive when compared to loan for residential property, the returns from the commercial property investment will make up for it. 

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