How to Get Shop Mortgage Loans in Easy Steps?

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Mortgage loans are the business loans/personal loans obtained by pledging a property. It is a type of secured loan that one can avail by keeping something as a security to the lender.

Such types of loans are a great option when one is looking to avail financial with long term repayment options of 15-20 years compared to unsecured loans. The best part you can choose the tenure as per your convenience to repay the loan amount. 

Why Mortgage Loan?

Mortgage loans can be availed by either a salaried individual or non-salaried individual and basically it is availed for educational expenses, marriage, business expansion, etc.

What Are Shop Mortgage Loans?

Shop Mortgage loans is wherein the shop is pledged as a security to avail the business loan amount required for managing and operating the shop.

The business loan is the amount of funds needed in a timely manner to run, maintain, renovate & upgrade.

How to Get Shop Mortgage Loans?

Following are the ways detailed stepwise to obtain mortgage loan against shop:

Credit Score

  • Primarily, it is very important to first check credit score for business loans/MSME loans.
  • Credit score is a direct reflection of the health of the business. It details the credit history of the business like the earlier loan taken by the business, the loan repayment history, etc.
  • A high credit score reflects the healthy business and it directly has a positive impact on the business loan/MSME business loan amount being granted and it also helps to obtain customized business loan interest rate.
  • Whereas a negative credit score may in turn have a bad impact on the potential of a business loan/MSME loan.
  • Thus, it’s very important for the business to first check its credit score and if it’s negative, then it needs to improve it.
  • Credit score can be improved by clearing the debts of the business by making the debt payment in a timely manner and also making full debt payments.

Budget of the Business loan/MSME Business Loan

  • The second important factor to avail shop mortgage loans is to evaluate the budget of the business loan/MSME loan needed for the business and then check its affordability.
  • Income against the expenses per month of the business has to be evaluated because that will give an understanding if the business can generate the revenue to pay for the down payment and also the monthly EMI or the insurance amount.

Type of Mortgage Loan

  • One needs to determine the type of mortgage loan as per the business needs.
  • There is the conventional mortgage which is not backed by the government and is basically provided by the private banks, credit union, etc. The eligibility criteria for this mortgage loan is very stringent and also it has high down payment terms.
  • Another mortgage loan is FHA loan or VA loan which are the government backed loans. These loans are less risky as they are insured by the government and moreover, they provide flexible loan repayment terms.

Paperwork Formalities

  • The next step is to check and prepare all the necessary paperwork required to avail the shop mortgage loans.
  • Paperwork such as ITR, additional assets, current liabilities, etc.
  • Business has to provide an income proof in terms of ITR to support the payment of mortgage. Additional assets will help in getting mortgage loans. Liabilities may affect the business loan amount.

Mortgage Rates

  • This step involves evaluating various lenders available in the market offering mortgage loans alongside their interest rates.
  • Interest rates do have a direct impact as it adds onto the business loans amount. Also there are other rates which add onto the business loan amount like processing fees, mortgage insurance, etc.

Getting Pre-Approved

  • Now, it’s time to get pre-approved for the mortgage loans. 
  • To get approved, the lender shall check the ITR, current liabilities, credit score, etc. 
  • Being pre-approved provides a stronger opportunity to avail the mortgage loan.

Frequently Asked Questions:

Is a mortgage loan easy an instant business loan?

Yes, a mortgage business loan is an instant business loan.

What are the documents required for business loan in shop mortgage loan?

The documents required for business loan under shop mortgage loan are identity proof, address proof, ITR, Form 16, Shop related documents, Bank Statement Copy, Business Registration Copy, Agreement Copy, Photograph, etc.

Is mortgage loan online business loan?

Yes, mortgage loan is an online business loan which can be applied online.

What is the eligibility for Mortgage loan?

The eligibility for mortgage loan is the age of the applicant, employment status – salaried or self-employed, Income source, Residential status, Residence place, etc.

Can business loan interest rate and EMI calculated by business loan EMI calculator?

Yes, by using business loan EMI calculator one can calculate business loan interest rate and the monthly payable EMI.

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