The amount of loan is decided by bank on the basis of income of the customer and the purchase value as well as market value of the property. The property to be purchased should legally and technically be acceptable for the purpose of creating mortgage.

How is the Loan Amount Determined?

The loan amount sanctioned by the bank is based on a combination of the applicant’s income, the purchase price, and the market value of the property. Moreover, the property must comply with legal and technical standards to be considered eligible for mortgage creation.

What Loan Amount Can I Expect?

The loan eligibility for purchasing industrial property is primarily influenced by:

• Loan-to-Value (LTV) Ratio: This reflects the proportion of the property's market value that a lender is willing to finance. For industrial property, the LTV usually falls between 50% and 60%, depending on the asset's nature and proposed usage.

• Income-Based Eligibility: The borrower's income plays a crucial role in determining how much loan they can afford. To get an idea of your borrowing capacity, try our Income Eligibility Calculator.

Understanding the Interest Rate

Interest rates for industrial property loans are generally higher compared to residential loans. These loans typically carry floating interest rates, which are influenced by external benchmarks such as:

• Treasury Bill Rate (TBR) or RBI’s Repo Rate for banks.

• Prime Lending Rate (PLR) or Floating Reference Rate (FRR) for NBFCs and Housing Finance Companies.

Although the margin set at the beginning of the loan stays fixed, the overall interest rate can rise or fall depending on fluctuations in the benchmark rates over time.

How Do I Repay the Loan?

Loan repayment is made via Equated Monthly Installments (EMIs)—a fixed sum paid every month. Each EMI consists of:

• Interest amount

• Principal component

While the EMI stays constant, the proportion of interest and principal changes during the loan term. You can check the likely EMI amount using our EMI calculator.

Loan tenure for industrial property can extend up to 15 years, subject to the borrower's age and income profile.

To understand how your repayments reduce the loan over time, use our Amortization Calculator.

Can I Add Co-Applicants to the Loan?

Yes, having co-borrowers is allowed—and in some cases, mandatory. All joint owners of the property must also be co-applicants on the loan.

People usually include co-applicants to:

• Increase loan eligibility.

• Reflect shared ownership of the property.

Lenders typically accept close family members as co-applicants. In cases where the property is registered under a firm, company, or business entity, the entity itself can also be included as a co-borrower or primary applicant.

Is Foreclosure or Prepayment Allowed?

Absolutely. Most financial institutions allow partial prepayment of up to 25% of the outstanding principal in a financial year without any additional cost.

• If the loan is taken by an individual, foreclosing the loan generally does not attract any penalty.

• However, if a business entity is involved, banks may charge a foreclosure fee ranging from 2% to 4% of the prepaid amount.

Borrowers can opt to either:

• Reduce the loan tenure, or

• Lower their monthly EMIs after making a partial prepayment.

Are There Any Additional Fees?

Yes, a processing fee is applicable for every loan application, often categorized as an administration or handling charge.

For industrial property loans, these fees are slightly higher than home loans, ranging from 0.25% to 1% of the loan disbursed.

When you apply through us, we actively negotiate with banks to get you the best deal possible, and in many cases, help offset some of these charges—saving you money from the start.

How is My EMI Structured?

Each EMI comprises two components:

• A portion of interest

• A portion of principal repayment

In the early years, the interest portion is higher. As the loan matures, the principal starts to make up a larger share of your EMI.

To visualize this breakdown, you can generate an amortization schedule using our free tool.

Amortization simply means spreading your loan repayments across a set period, with regular installments contributing towards both interest and principal.