Commercial interest only loans are commercial loans that give you an option to pay just the interest on the loan for some initial period of repayment, say 5 years or 10 years. It also gives the option of paying the interest plus as much principal as you want. The main advantage of this loan is the lower interest you pay each month even though the interest rate is the same. They also help to considerably control the monthly payment and cash flow. After the initial period, the repayments are raised to fully amortized levels. These loans allow for a large principle prepayment if desired. Interest only loans can be fixed-rate mortgages or adjustable-rate mortgages.

Commercial interest only loans are meant for businessmen and investors. They are provided on the basis of securities like offices, shops, businesses, warehouses, motels and hotels, residential investment properties and other commercial, retail or industrial properties. The loans are provided to individuals, trustees or corporations. For private companies, the directors of the companies should act as guarantors. Commercial interest only loans generally provided are up to 70% of RBFs valuation of the property/ properties that are kept as security. The minimum loan amount is $50,000. Interest only loans can also be secured by way of second mortgages.

There are many factors to be considered when applying commercial interest only loans, especially one that is based on adjustable mortgage rate. Even though they are an attractive option, they involve a fair amount of risk. With increasing real estate prices, interest-only loans are becoming a preferred option for many. There are also many lending companies that are giving attractive options on interest-only loans. Information about interest-only loans is available on the Internet. They also contain easy-to-use interest only calculators that give you the repayments you will have to make on an interest only loan.