Check your eligibility
What These Loans Fund
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Purchase of ready commercial prope...
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Purchase of under-construction com...
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Registration and stamp duty at som...
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Purchase of a unit in an approved...
Who Can Consider This Loan?
- Indian resident or NRI, generally aged 21 to 65 at loan maturity
- Salaried: stable employment, commonly two years total with one year current
- Self-employed: three years of business vintage with filed returns
- Property with clear, marketable title and approved plans
- Credit score materially affects both approval and the rate offered
- Total EMI obligations usually capped at 50 to 60% of net income
What May Not Be Funded?
- Down payment, typically 25 to 40 per cent
- Fit-out and interior costs
- Properties in unapproved or unauthorised complexes
- GST on under-construction commercial purchases
- Processing, legal and technical charges
Always check the sanction letter before you commit.
Why Choose Wealth & Covers?
- Expert advice to choose the right plan
- Plans from leading loans companies
- Hassle-free process and documentation
- End-to-end support, including claim assistance
- Dedicated relationship manager
- Expert Guidance Personalised advice from experienced loans professionals.
- End-to-End Support From choosing the right plan to claim assistance, we are with you always.
- Claims Assistance Hassle-free claim support to ensure you get what you deserve.
- Transparent Process Clear information, easy documentation and a hassle-free experience.
Overview
A commercial property loan funds the purchase of an office, shop, showroom or commercial unit. Lenders assess it differently from a home: the property's rental yield and marketability carry as much weight as the borrower's income.
Funding percentages are lower, typically sixty to seventy-five per cent, and tenures are shorter. Rates sit above home loan rates because commercial property values are more cyclical and a vacant commercial unit is harder to sell than a vacant flat.
Where the property is let, an existing lease with a creditworthy tenant materially improves the terms. The lender can see the cash flow servicing the loan, which is a different proposition from relying on the borrower's salary.
Who should consider it
Investors buying commercial property to let. Businesses buying their own premises rather than renting. Professionals buying clinic or office space for their practice.
Benefits
- Enables acquisition of an income-producing asset
- Interest is deductible against rental income for a let property
- Businesses buying their own premises convert rent into equity
- Better terms where an existing lease underpins the cash flow
- Tenure up to fifteen years at most lenders
- Loan against the same property available later for expansion
What the loan funds, and what it does not
Read the right-hand column first. It is the one that decides how much you have to arrange yourself.
Usually funded
- Purchase of ready commercial property with clear title
- Purchase of under-construction commercial units from approved developers
- Registration and stamp duty at some lenders, within limits
- Purchase of a unit in an approved commercial complex
Usually not funded
- Down payment, typically 25 to 40 per cent
- Fit-out and interior costs
- Properties in unapproved or unauthorised complexes
- GST on under-construction commercial purchases
- Processing, legal and technical charges
- Properties the lender assesses as having a thin resale market
Funding limits and the treatment of add-ons vary between lenders and move with the borrower profile. The sanction letter you receive is what governs — we will walk you through it before you sign.
How it works with us
- 1 Eligibility assessed before any application goes out Income, existing EMIs, credit profile and the property itself. Scattering applications across lenders damages your credit file for no benefit.
- 2 Compared on total cost across the full term Rate, processing fee, insurance bundling and prepayment terms together. Over twenty years, half a percentage point is a very large number.
- 3 Legal and technical due diligence Title search and valuation. This is also the stage that protects you, not just the lender — a title problem found now is a problem avoided.
- 4 Sanction, and reading it properly The sanction letter states the rate basis, reset frequency and every charge. We go through it with you before you sign.
- 5 Disbursal, and a plan for prepayment Funds released against the agreement or construction stage. We set out how prepayment would work, because it is the single biggest lever you hold.
Important considerations
The things a brochure tends to leave out. Read these before you decide.
- A signed lease with a creditworthy tenant is the strongest thing in your application. It changes both the funding percentage and the rate.
- Commercial vacancy is a longer and more expensive problem than residential vacancy. Model the EMI against a realistic vacancy period, not full occupancy.
- Fit-out is a substantial cost that the loan does not cover. Budget it separately, particularly for retail and clinic space.
- Verify the commercial use approval for the unit. A residential unit used commercially creates problems with both the lender and the authorities.
- Interest is deductible against rental income without the ceiling that applies to a self-occupied home. For an investor that changes the effective cost considerably.
Documents required
- Identity proof — Aadhaar, PAN or passport
- Address proof
- Salaried: last three months of salary slips, Form 16 and appointment letter
- Self-employed: last three years of income tax returns with computation and financials
- Bank statements for the last six to twelve months
- Property documents — sale agreement, title deed, approved plan
- Property tax receipts and encumbrance certificate
- Existing loan statements, where you are servicing other EMIs
Frequently Asked Questions
How is this assessed differently from a home loan?
The lender looks at the property's rental yield and how easily it could be sold, alongside your income. A commercial unit with a signed lease to a creditworthy tenant is a much stronger proposition than an empty one, and the terms reflect that.
Why is the funding percentage lower?
Because commercial property values are more cyclical and a vacant commercial unit is considerably harder to sell than a vacant flat. Lenders take a larger margin to reflect that.
Is the interest tax deductible?
Where the property is let, interest is deductible against the rental income, and without the ceiling that applies to a self-occupied residential property. For an investor that is a material difference in effective cost.
Can my business buy its own premises this way?
Yes, and for many established businesses it is a sound move — converting rent into equity in an appreciating asset. The assessment then looks at the business's financials rather than a salary.
Does the loan cover fit-out?
Generally not. Interiors and fit-out are excluded and can be a substantial cost, particularly for retail or clinic space. Budget for them separately rather than assuming the loan stretches.
Want a shortlist instead of a catalogue?
Tell us the situation and an advisor comes back with two or three options that actually fit — and names what each one gives up.