SBI Commercial Property Loan

Securing funds for commercial property is a pivotal step for entrepreneurs and businesses to establish their footprint in an ever-growing landscape. Advertently, the State Bank of India facilitates these aspirations. With SBI’s commercial building loan, experience a robust offering as a business to capitalise on your real estate opportunities.

This scheme can be used for various purposes, including purchasing commercial space, investing in retail property, constructing a commercial building, expanding existing commercial property, etc. Read this guide to understand the key features, benefits, and considerations of SBI commercial property loans.

SBI Commercial Property Loan - Highlights

Feature Details
Rate of Interest Starts at 8.40% p.a. (Sept 1, 2023)
Maximum Loan Amount 50 Crores - Metro/Urban areas; No Limit - Rural areas
Repayment Tenure Flexible repayment to suit your needs
Documentation Minimal documents required
Loan Tenure 10 years
Collateral Usually, the commercial property itself acts as a collateral

SBI Commercial Property Loan - Features and Benefits

Below are the significant features of Commercial Loans from SBI:

  • Competitive Interest rates
  • Flexible repayment tenure 
  • Transparent fee structure
  • Accessible to a wider range of customers
  • Seamless application process
  • Quick approval and disbursement
  • Dedicated relationship managers

SBI Commercial Property Loan - Interest Rates

SBI commercial property loans aren't typically distinguished by loan size, but interest rates differ for loans below Rs.10 crore and above. In simple terms, the interest rates differ for amounts below and above Rs. 10 crore. Starting from 8.40% p.a. (as of September 1, 2023), the interest rates are competitive and flexible, with variations based on loan amount and tenure. In addition, the interest rate declines based on everyday reducing balance, making it a perfect choice for entrepreneurs and seasoned businesses for some commercial property investment.

SBI Commercial Property Loan - Eligibility Criteria

Take a look at the eligibility criteria of an SBI loan for the construction of the commercial building:

  • Customers who already hold an account in SBI bank 
  • The borrower must be a business entity, such as a sole proprietorship, partnership, or limited liability company.
  • Security or collateral in the form of market asset of that property
  • Applicants are required to submit their credit reports 
  • The property being financed must be located in India.
  • The loan-to-value (LTV) ratio for the property cannot exceed 75%.

SBI Commercial Property Loan - Documents Required

Explore the essential documents required to apply for an SBI Commercial Property loan:

Document(s) Purpose
Business registration documents Verify business ownership and operations
Financial statements Assess financial health and loan repayment capacity
Property documents Verify property ownership and value
Income proof for salaried/self-employed Determine income stability and loan eligibility

SBI Commercial Property Loan Processing Fees and Other Charges

While SBI Commercial Property Loan offers transparent charges, it's crucial to understand the associated fees and charges before you commit. Here's a breakdown:

Fee/Charge Details
Processing fee Up to Rs. 50 lakhs: 0.50% of the loan amount Above Rs. 50 lakhs and up to Rs. 5 crores: 0.25% of the loan amount Above Rs. 5 crores: Negotiable
Pre-payment charges A prepayment penalty ranges from 2% to 4% of the outstanding principal amount.
Stamp duty and registration charges Applicable as per government regulations
Commitment Fee 0.25% p.a. on the unutilised portion of the loan amount.

SBI Commercial Property Loan - Terms and Conditions

Remember, the SBI Commercial Property Loan comes with certain terms and conditions you need to be aware of:

  • Loan-to-Value (LTV) Ratio: The maximum LTV for this loan is 75%. This means you must provide a minimum down payment of 25% of the property value.
  • Repayment Period: The maximum repayment period for this loan is 10 years. However, the actual term may vary depending on the loan amount and purpose.
  • Security: The commercial property being financed serves as the primary security for the loan. Additional security may be required in certain cases set by the bank.
  • Moratorium Period: A moratorium period might be available for construction purposes, allowing you to pay only the interest during construction.

Quick Tip: Carefully review the loan agreement and understand all the terms and conditions before signing.

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