What are the advantages of taking a loan against commercial shop?

If you require funds during emergency, you can easily get a loan if you have sufficient assets to keep as collateral or mortgage with the lender. This is known as a secured loan and to avail it, you need to have a residential or commercial space under your ownership, that you can mortgage. A loan against commercial property or loan against commercial shop involves keeping your commercial space as mortgage with your lender. It is a secured loan that fulfils your fund requirement for different needs like a medical emergency, children’s education, other personal expenses, etc. You can also transfer your existing loan against commercial shop to another lender. Read on to learn more about the advantages of this type of loan.

A commercial shop may include a grocery store, hotel, restaurant, pharmacy, office premises, etc. You can borrow a sufficient amount of loan against these types of properties to meet your financial requirements. It would help in a continuous supply of funds, so that you do not have to postpone a specific activity due to lack of financial support.

The advantages of a loan against commercial shop are:

You can get high value loans

You can get a significant amount of loan starting from a few lakhs up to crores under this category. Check your eligibility to get competitive interest rates while borrowing.

Simple and minimal documentation

You require a minimum number of documents for application like your ID, income proof, KYC documents, etc. The lender’s aim is to disburse the loan to you within few days after you apply. They would not burden you with the submission of a range of documents that would be difficult for you to arrange within a short time.

Flexible loan

You can withdraw specific amounts as per your requirement from a pre-sanctioned loan amount. Pay interest only on the amount that you have withdrawn or utilised instead of the entire amount. This would be a comfortable option for you. You can also pay back only the interests in EMIs (equated monthly instalments), depending on your lender’s terms.

Online transactions

Go for the online facilities and track your loan account as per your convenience. This is one of the best features offered by lenders on loan against property (LAP).

Flexible payment terms

This type of loan is highly flexible in terms of repayment. If you are a salaried individual, you have to repay it before your retirement. The lender may provide an extension if you have a guaranteed post- retirement income. In case you are self-employed, there is a maximum age limit, generally 60 or 70 years. You need to close the loan before you attain that age.

Relationship managers

Some lenders may provide a dedicated relationship manager to help you with your queries, loan disbursement, EMIs, etc. In case you have any doubt, you can contact him at your convenience.

Insurance covers

Your lender may require you to get a life insurance cover, particularly if you are taking a home loan. The premiums are affordable and the policy covers you during the entire loan duration. They may offer a property insurance cover to protect against accidents or damages. You can get funding for the insurance premiums also.

Loan transfer

You can transfer your balance loan to a different lender if you find lower interest rates, better repayment options, top-up loans, lesser charges, etc. even after you have started paying EMIs.

Online calculators or EMI calculator for LAP

You will find online loan against commercial property calculators for EMIs and eligibility. You have to put in certain details and get information regarding the amount of loan you are eligible for, the monthly EMIs, etc. This would help to plan your finances in advance. A loan against commercial shop is a quick and easy way to meet your fund requirements. The requirement is that you should own a commercial property that you can put up as collateral. This loan has various benefits, a short processing time and minimal documentation. If you think that you are getting better alternatives, you can even switch over to a new lender. Calculate the EMI and go through the loan terms carefully as they may vary between different lenders before you finalise the loan with a specific lender.

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