What is Commercial Property Purchase
This loan is also called Non Residential Property Purchase (NRP) Loan. It attracts the same interest like Loan against Property.
The procedure followed is similar to the typical home loan.
The main differences being the lower tenure, higher interest rate & lower funding.
Maximum funding is upto 60% of market value as compared to 80% for home loans.
Banks will fund the purchase of an under construction or ready commercial office space and create a first charge on the property by equitable mortgage.
The original agreement would be deposited with the bank and released once the loan in fully repaid.
Bank will disburse the loan in the name of the builder/seller.
What are the End uses of this loan?
The property purchased can be used to set up:
- Nursing Homes
- Medical Shops
- Diagnostic & Medical Labs
Basic Product Features
Loan Amount Minimum 10 lacs to Maximum 50 Crs.
Tenure Minimum 1 year to maximum 15 years.
Minimum age of 25 to maximum age of 58 or 60
Minimum age of 25 to maximum age of 65
Maximum Funding: Ranges from 70 to 80% of Agreement Value
50 to 60% of Market Value whichever is lower.
Rate of Interest Presently ranges from 13 to 15% reducing. The rate of interest varies from bank to bank & also depends on the credit rating of each proposal.
Percentage of project Completion Most banks today fund properties with 80% completion
|Processing Fees||The processing fee varies from bank to bank. Most bank charge an upfront fee along with the application. The balance fee is collected at the time of disbursement. It may also be deducted from the loan amount at the time of disbursement.|
|Stamp duty||Stamp duty of 0.2% of the loan amount is charged for the loan agreement between the borrower & the bank.
In case of registered mortgage, banks charge 0.5% of the loan amount.
|Legal & Search Charges||Amount varies from bank to bank. Some banks do not charge|
|Valuation Charges||Amount varies from bank to bank. Some banks do not charge|
|Insurance||Banks try to insure the loan by tying a life insurance and/or property insurance with the loan. The one time insurance premium depends on the age & loan amount. This amount is generally added to the loan amount.|
|Pre-EMI||The banks may ask for a Pre-emi cheque depending on the date of disbursement & the EMI cycle.|
|Prepayment charges & Foreclosure charges||These charges are still applicable to LAP though it has been waived off for Home Loans.
Banks allow upto 25% of outstanding principal to be repaid every financial year. A penalty of 2% is applicable if the prepayment exceeds 25%.
Foreclosure charges vary from bank to bank.
|Documentation charges||Nominal documentation charges may apply which will be communicated at the time of agreement signing|
Banks and Financial Institutions offering Commercial Property Purchase
We deal with the MNC, Private Sector, Nationalized & Co-operative Banks in India. We also facilitate lending from NBFCs. We do not arrange for Private Finance.
Areas of Operation
The professional consultancy fees applicable will be communicated by a “ Letter of Mandate” which will outline the terms & conditions. The work on the proposal starts once the “Letter of Mandate” is formally accepted by the client.
Loan Documentation Requirements
Click the links below to see the list of documentation for