Get A Gold Loan For Commercial Property

There are several reasons why gold loans can be considered the most convenient financing option to purchase a commercial property. Read to know!

19 Dec,2022 11:36 IST 1958 Views
Get A Gold Loan For Commercial Property

Commercial properties generate higher returns. For example, they yield higher rent than residential properties. Thus they are in greater demand than residential properties.

Loans to buy commercial property are also readily available from a wide range of lending institutions, making financing the investment easier. Before discussing financing options for commercial real estate, let's examine how an individual can successfully invest in it and earn the maximum return.

Uses Of A Commercial Property

For individuals seeking to invest in commercial properties for capital appreciation, several options are available to maximise returns. The following are a few opportunities of this type.

• As A Rental Property

For a property owner, renting out commercial spaces is lucrative, regardless of their size. Renting commercial plots, from shops to offices, can generate high returns especially if the property is located in a favoured area.

• Starting A Small Business

Due to the increasing demand for such services, commercial loans for a property are becoming increasingly popular. It is valuable for setting up small businesses like beauty salons, boutiques, etc.

The market for properties in these fields is incredibly competitive, but the returns can be substantial if an individual can purchase a property in a prime location.

• Setting Up An Office Space

In an era when start-ups are popping up everywhere, entrepreneurs can take advantage of commercial space to launch their businesses. Any business must have a functional office. Buying a commercial property, albeit small, can help individuals achieve that goal.

• Opening A Grocery Shop

Grocery shops, kiranas, or even supermarkets can be profitable businesses for budding entrepreneurs. They require commercial spaces to set up their products and offerings. Being an evergreen business idea, it is another great way to leverage commercial property to generate recurring revenue.

You can use commercial properties for various business-related activities, such as establishing malls, hotels, community centers, warehouses, and more.

Despite their lucrative potential, investing in these properties comes with a hefty price tag. Furthermore, additional costs can be associated with purchasing a property, which can require significant funds.

The gold commercial loan can assist in meeting the requisite expenses.

Benefits Of Availing Of A Gold Loan For Commercial Property

Since the emergence of digital lending companies in the past few years, Indians have succeeded in tapping into gold full potential as a lending and borrowing medium. Gold loans are the most convenient option for financing a commercial property due to several factors. Listed below are a few benefits of using the gold loan for commercial buildings.

• Nominal Interest Rates

Compared to other unsecured loan options, gold loans can be significantly more cost-effective due to their secured nature. Due to the involvement of collateral, individuals can take advantage of competitive interest rates.
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• Unrestricted End-Use

Without comprehensive financial support, purchasing a commercial property can be difficult. A gold loan helps with purchasing the property and other expenses such as interior fit-outs, registration fees, stamp duty, and surcharges. Since the loan is secured by the gold pledged, borrowers can take out as much as they wish within the gold value limit and pay for such expenses.

• Hassle-Free Documentation

Individuals do not need to submit extensive documentation to qualify for this loan. As lenders sanction gold loans solely based on the value of the gold pledged, they don't require borrowers to submit proof of their income or income tax returns.

• No Credit Score

In most loans, lenders determine the loan amount by the borrower's repayment capability and credit history. Gold loans, however, are different. With gold as collateral, lenders know that the principal portion will be repaid and do not consider the borrower's credit history when granting loans.

• Security Of Physical Gold

Keeping the gold safe is the lender's responsibility. They usually store it in a bank's vault, so borrowers do not have to worry about it. Upon repayment of the loan, the bank returns the gold.

• Easy Application Process

Potential borrowers can easily apply for a loan through the lender's website, their official app, or by calling the lender. Applying through the app can be extremely handy since one can initiate the application process anytime, anywhere, through their smartphone.

• Highest Loan To Value

An LTV is the maximum amount a borrower can borrow from the pledged asset. NBFCs such as IIFL Finance offer maximum commercial loans against gold to individuals, allowing them to maximise their profits.

IIFL Finance Offers The Perfect Gold Loan

By applying for a gold loan from IIFL Finance, you benefit from the best features in the industry, including the ability to receive instant funds based on the value of your gold within 30 minutes of submitting your application. With IIFL Finance Gold Loans, you will find the lowest interest rates and lowest fees. The fee structure at IIFL Finance is transparent, so you won't incur any hidden expenses.

Frequently Asked Questions

Q1. Who is eligible for a gold loan?
Ans. A gold loan is available to anyone between the ages of 21 and 70 years who has gold to pledge as collateral. Applicants do not have to meet stringent eligibility requirements to qualify for this loan, unlike other loans.

Q2. Can you buy commercial property using a gold loan?
Ans. Like personal loans, gold loans don’t have a predetermined purpose. Therefore, you can use them for various financial needs, including purchasing a commercial property.

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Disclaimer: The information contained in this post is for general information purposes only. IIFL Finance Limited (including its associates and affiliates) ("the Company") assumes no liability or responsibility for any errors or omissions in the contents of this post and under no circumstances shall the Company be liable for any damage, loss, injury or disappointment etc. suffered by any reader. All information in this post is provided "as is", with no guarantee of completeness, accuracy, timeliness or of the results etc. obtained from the use of this information, and without warranty of any kind, express or implied, including, but not limited to warranties of performance, merchantability and fitness for a particular purpose. Given the changing nature of laws, rules and regulations, there may be delays, omissions or inaccuracies in the information contained in this post. The information on this post is provided with the understanding that the Company is not herein engaged in rendering legal, accounting, tax, or other professional advice and services. As such, it should not be used as a substitute for consultation with professional accounting, tax, legal or other competent advisers. This post may contain views and opinions which are those of the authors and do not necessarily reflect the official policy or position of any other agency or organization. This post may also contain links to external websites that are not provided or maintained by or in any way affiliated with the Company and the Company does not guarantee the accuracy, relevance, timeliness, or completeness of any information on these external websites. Any/ all (Gold/ Personal/ Business) loan product specifications and information that maybe stated in this post are subject to change from time to time, readers are advised to reach out to the Company for current specifications of the said (Gold/ Personal/ Business) loan.

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