What is Loan Against Commercial Property?
A Loan Against Commercial Property is a secured loan offered by banks or financial institutions where you mortgage your commercial asset—like an office, shop, or warehouse—to raise funds. This type of loan is ideal for business owners, self-employed professionals, or companies looking to fund expansion, manage cash flow, or meet large expenses. The biggest benefit is that the property remains in your ownership while allowing you access to high-value loans with lower interest rates and long repayment tenure. It’s a practical way to use your property for financial growth.
What is Loan Against Commercial Property?
A Loan Against Commercial Property (LACP) is a type of mortgage loan where you pledge a commercial property you own as collateral. Based on the property’s market value and your financial profile, lenders offer a loan amount typically ranging from ₹10 lakhs to ₹10 crores or more. These loans are available to both individuals and businesses.
Key Features of Loan Against Commercial Property
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Secured Loan: Backed by your commercial property
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Low Interest Rates: Ranges from 8% to 11% per annum
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Flexible Tenure: Up to 15–20 years
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High Loan Amount: Based on 60%–75% of the property’s market value
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Quick Disbursal: Loan processed within 7–10 working days
Who Can Apply?
The following individuals/entities are eligible for a Loan Against Commercial Property:
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Business owners
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Self-employed professionals (doctors, architects, etc.)
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Partnership firms
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Private limited companies
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LLPs
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Salaried individuals with high-value commercial property
Benefits of Loan Against Commercial Property
1. Higher Loan Amount
Commercial properties have higher market value than residential ones. So, you can get a larger loan amount, which is useful for major business needs like infrastructure, inventory purchase, or new branch setups.
2. Lower Interest Rates
Since the loan is secured with a commercial property, lenders offer it at lower interest rates compared to unsecured business loans or personal loans.
3. Longer Repayment Tenure
Loan repayment periods go up to 20 years, helping you manage EMI payments better. You can choose monthly EMIs that suit your cash flow.
4. Retain Ownership
Even though your commercial property is mortgaged, you retain ownership and can continue using or renting the property during the loan tenure.
5. Flexible Use of Funds
The loan amount can be used for various purposes like:
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Business expansion
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Equipment purchase
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Marketing and advertising
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Employee salaries
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Debt consolidation
Required Documents
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Proof of identity (PAN, Aadhaar)
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Address proof
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Ownership documents of the commercial property
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Business registration proof (if applicable)
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Latest ITRs and financial statements
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Bank statements (last 6–12 months)
How to Apply for Loan Against Commercial Property
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Check eligibility criteria from your preferred bank/NBFC
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Calculate your EMI using an online LAP calculator
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Prepare necessary documents
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Apply online or visit branch
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Property valuation and legal verification
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Loan approval and disbursal
Most banks offer online LAP services, and the process has become faster and more transparent in recent years.
Top Lenders Offering LACP in India
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HDFC Bank
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ICICI Bank
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Axis Bank
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Kotak Mahindra Bank
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Bajaj Finserv
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Tata Capital
Compare interest rates, processing fees, and foreclosure charges before finalizing a lender.
Final Thoughts
A Loan Against Commercial Property is a smart financing option for businesses and professionals needing quick and large-scale funds. It offers flexibility, affordable EMIs, and longer repayment periods without sacrificing property ownership. If you own a valuable commercial property, you can unlock its potential to support your financial and business goals with ease.