Loan for property purchases has become very popular. It’s a great way to invest. Most of the people take property loans for purchasing residential property, but nowadays, we have seen a rising demand for commercial property loans at the same time. This loan is used for purchasing commercial space like an office or an outlet from the financial agencies.
When you are going to take this loan, you need to be very conscious about few points to save your money and control the investment. There is a wide range of loan options available in the recent financial market but you should be very selective. There are some important factors that you need to know about the commercial property loan before applying for it.
Key features of Commercial Property Loan:
Before you go ahead and apply for this loan, you must know that there is a difference between commercial and residential property loans.
You can purchase or take a commercial property on lease. This can be an office, clinic or outlet.
Besides the purchase of commercial space, you can use commercial property loan for extension and improvement of office or outlet.
You can use this loan for renovation as well.
Most of the banks will provide you with the right counseling and guidance to help you make the best use of this loan amount.
You also get the leverage of flexible tenure of repayment.
Who is eligible for this Loan?
This loan is available to the following:
Company secretary
Lawyer
Self-employed
Architect
Consultant
Doctor
Checklist for Commercial Property Loan:
Here you will get to know about some important points that you should check while applying for the commercial property loan and getting its approval soon. Since these loans have become very popular, it becomes important to choose the right loan provider. There are various factors that you must take into account before applying for a commercial property loan.
Interest rate: the first factor that works for you is the interest rate. It determines the EMIs. Make a comparison of the interest rates before applying for a loan.
Fees: The next point is the fees. Since this may vary and there is a different type of fees, you must ask the bank about the same. Application fees, administration changes, online monthly or annual fees are something that you should talk about.
Repayment tenure: Don’t miss to ask about the repayment tenure. Check if you are required to pay the principal and interest repayment from day one or only internet repayment for the initial period. Your bank would be able to provide you with this information.
Maximum LVR: You must also find out how much amount the lender can provide you on a particular commercial property. For example, if you are willing to buy a commercial property worth $750,000 and if a lender A is providing LVR of 70% while there is another lender B is providing LVR of 60 %. Then lender A will ask for a deposit of $225,000 and if you use Lender B, then the amount rises to $300,000.
Wrapping it up: Now that you know all about commercial property loans and its features, it will now be easier for you to apply for the same. This is a great way to buy a new office space and start your business. However, it is always advisable that you must not make a decision in a hurry, make a comparison on the above-mentioned parameters and then choose the one which matches your budget and requirement.
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