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A commercial property loan, as its name suggests, allows you to access loan funds by putting up your commercial property as collateral. In other words, you can mortgage your commercial property to avail of a commercial property loan.

This means of mortgaging offers you ample financing to fund your business expansion or cover your other personal expenses. A commercial property loan allows you to avail as much as 60% of the property’s market value as a loan. 

Read on to find out more about all the aspects of a commercial property loan in India that you need to know before applying for it.

Commercial Property Loan Interest Rates 2023

The following tables provide commercial property loan interest rates, along with other applicable charges and fees if you avail it from Bajaj Housing Finance Limited.

Here are the commercial loan interest rates:  

Applicant Category

Effective Rate of Interest (per annum)


9.75% p.a. onwards

The charges applicable to your loan are as elucidated below:

Fee Category

Applicable Charges

Procesing Fee

Up to 0.5%-2% of the loan amount

Foreclosure Charges

4% of outstanding loan amount + GST

The Pre-payment and foreclosure charges for individuals are as listed below:


Flexi Loan

Term Loan

Time Period


> 1-year

Foreclosure Fees



Part Payment Fees



The Pre-payment and foreclosure charges for non-individuals are as listed below:


Term Loan

Flexi Loan

Time Period


> 1-year

Foreclosure Fees

4% on the outstanding principal

4% on the sanctioned amount during the Flexi Interest Only Loan Repayment Tenure and 4% on the available Flexi Loan Limit during the Flexi Term Loan Tenure

Part Payment Fees

2% on the Part Payment Amount


Disclaimer: Commercial property loan interest rates and other charges are subject to change as per the lender’s terms and policies.

Commercial Property Loan EMI

Once the commercial property loan is disbursed, the repayment tenure ranges up to 15 years, with a monthly EMI applicable on the same. 

The interest rates for loans against commercial properties start from 9%, depending on a range of factors such as: 

  • Market value

  • Mortgage

  • Credit history

  • Income generation ability

  • Documents available

When your interest rate is decided, make use of a commercial property loan EMI calculator to help you better plan for your payments.

Benefits of Commercial Property Loan

A commercial property loan has a number of benefits for business owners. Some of these benefits are as follows. 

  • Higher Amount of Loan: Most banks offer a commercial property loan amounting to 60% of the property. The maximum loan amount offered by most banks and NBFCs can go up to ₹15 Crores, which helps you meet big-ticket expenses.

  • Lower Rate of Interest: As it is a secured loan, financial institutions offer these loans at lower commercial loan interest rates. The commercial property loan interest rates can start as low as 9% per annum.  

  • Easy Application Process and Simple Terms: Unlike other types of loans, a commercial property loan does not require a lot of paperwork. In addition, there are no end-usage restrictions, so you can use it for a wide range of expenses.

  • Custom Loan Solution: Given that every business has its own unique needs and requirements, these loans are designed to meet the specific needs of most businesses.

Commercial Property Loan Eligibility

To avail of this type of loan, you need to fulfil the commercial property loan eligibility criteria. Here is a table highlighting the general terms to know. 





Must be a citizen and resident of India

Must be a citizen and resident of India


28 – 58 years

25 – 70 years

Employment Status

Employed in public, private or MNC sector

Should have a regular source of income


Varies from city to city, starting from ₹25,000 to ₹35,000

Varies from city to city, starting from ₹25,000 to ₹35,000


Over 3+ years of experience

Over 5+ years of experience

Commercial Property Loan Documents

The following are the documents required for a commercial property loan:

  • Proof of Identity: PAN card, Aadhaar card, Passport, Voter ID, or Driving Licence

  • Proof of Address: Aadhaar card, Voter ID, Passport, Ration card, and Utility bills

  • Property Documents: Title documents and other documents related to mortgage and ownership

  • PAN details or Form 60

When it comes to employment and income proof, the following documents must be presented by salaried and self-employed parties:




Proof of Employment

Employer-issued identity card

Business registration certificate, partnership agreement, and so on



Proof of Income

Income Tax Return for the last year

Income Tax Return for the last 2 years

Last 2 month’s salary slips

Balance Sheet and Profit and Loss statements

Last 3 month’s bank account statements

Last 6 month’s bank account statements

How Does a Loan on Commercial Property Work?

If opting for a commercial property loan in India, you must first understand how it works. The following 3 factors must be kept in mind:

  • Collateral: If you choose to opt for a commercial property loan, you must first start by owning commercial property, which you can mortgage. This can be in the form of a grocery shop, office building, manufacturing shop, and so on.

  • Loan Amount: The amount of loan that you can avail of with a commercial property loan depends on the market value of the property. It is called loan-to-value or LTV. Note that LTV on commercial loans is generally lower than on residential loans.

  • Repayment: Commercial property loans have longer tenure in comparison to other loans, which can range up to 15 years. To plan your finances better, you can use a Loan Against Property EMI Calculator to determine the EMIs against your loan.

How to Apply for Commercial Property Loan

If you are considering applying for a commercial property loan, here are a few steps that you need to follow:

  • Step 1: Visit the official website of the lender

  • Step 2: Look for the ‘Commercial Property Loan’ 

  • Step 3: Click on the ‘Apply Now’ button provided there

  • Step 4: Fill in the application form with the required details like your name, contact, and employment details

  • Step 5: Next, enter details pertaining to your income and finances

  • Step 6: Proceed by submitting the application form online

Once you have done so, a representative from the lending agency will get in touch with you. The representative will help you to process and approve your commercial property loan application.

Differences Between Funding Residential and Commercial Property

The differences between funding residential and commercial properties are as listed below:

Residential Property

Commercial Property

Typically offered to individual borrowers

Typically offered to business entities

The repayment tenure for the mortgage in this category is 30 years, at a fixed rate

The duration varies, from less than 5 years to 20 years, with a variable rate of amortisation

High loan-to-value ratio, or sometimes even 100%

Commercial property loan LTV - Loan-to-value ratio lies between 65% and 80%

Things to Keep in Mind Before Applying for Commercial Loan

Before applying for a commercial property loan in India, make sure you are cognizant of the following key aspects:

  • If you are applying for a commercial property loan on a project that is still under construction, run a background check on the builder. If the lender stumbles upon any discrepancies in the builder’s records, your loan stands a chance of being rejected.

  • Make it a point to ensure that the builder has already secured all the requisite approvals for the construction.

  • To avoid paying a higher amount, ensure that you first get the property evaluated by a professional.

In conclusion, a commercial property loan is the best-suited option if you wish to avail of a higher low amount at lucrative interest rates. However, it is advisable that you plan your finances using a Commercial LAP EMI calculator before you apply for one.  

FAQs on Commercial Property Loan in India

Yes, you can get a loan on commercial property. However, you must note that the commercial property loan LTV (loan-to-value) ratio is limited to about 55%. On the other hand, it lies between 75% - 90% in the case of residential properties.


The major difference between a home loan and a commercial property loan is the loan tenure. While the commercial property loan’s tenure is restricted to a maximum of 10 years, that for a home loan can go up to 30 years.


Technically, there is no limit to the number of commercial loans you can have. However, financing the same can prove to be a challenge.


Yes, you can obtain a mortgage on commercial property.  


The ideal credit score to avail of a commercial property loan is 750 or more.


Although the RBI has not issued any directive for the same, it is advisable to insure your property for any calamities.


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