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Shop loan is a credit facility that is used for the purchase of a shop anywhere in India. Shop loan can be availed to open any type of loan it may be the grocery store, garment store, kirana store, retail outlet, coffee shop, medical store, mobile, coffee house, wine, pharmacy, or any other type of business. The loan amounts can be of varying amounts depending upon the nature of the business. The interest rate shall also vary depending upon the lender and the applicant’s profile.
Features & Benefits
- Interest Rate: Depends upon business requirements
- Loan Amount: From Rs. 10,000 – Rs. 2 crore
- Processing Fee: From Nil to 4% of the sanctioned loan amount
- Collateral: Not required for unsecured loans
- Repayment Tenure: From 12 months to 5 years
- Foreclosure charges shall vary from bank to bank
Also Know: How to apply for an MSME loan online and get approval in 59 minutes
Eligibility Criteria
- Age: Minimum 18 years and Maximum 65 years
- Nature of business should not be blacklisted
- Business address should not be in a negative location
- Business establishment should be at least 6 months
- Applicant should not have defaulted with any financial institution
Documents Required
- Passport-sized photographs
- Applicant’s Identity, Age, Address, and Income Proofs
- Business address
- Business tenure, if already established
- Last 6 months’ bank statement
Steps to Apply for a Shop Loan
Here, you can check and compare various loan deals offered by various lenders. Applicants can pick the loan deal that suits the business requirements by filling out and submitting the loan application form online. The respective lender shall proceed with the loan formalities. After documents are verified and the loan is approved, the loan amount shall get disbursed in the bank account as already mentioned by the applicant. Applicants can also opt for government loan schemes to purchase shop(s).
FAQs
Q1. Do I need to submit any collateral to take a shop loan?
Ans. No, most financial institutions do not ask for any collateral or security.
Related Post: How to Get collateral-free Loans for Your Start-up?
Q2. Do banks check my CIBIL or credit score before sanctioning a loan for a small retail shop?
Ans. Yes, several banks check your CIBIL score before loan approval and recommend having a minimum CIBIL score of 700 or above.
Q3. What is the minimum loan amount offered as a loan for a shopkeeper?
Ans. There is no minimum loan amount criteria to avail a shop loan.
Q4. What is the repayment tenure of a shop loan?
Ans. The repayment tenure shall depend on the interest rate and loan amount. However, it ranges between 12 months to 60 months.