A loan against property incurs one of the lowest EMIs amongst other financing options available today in the market. Flexible tenors with the opportunity to extend it as high as 15 years make loan against property an advantageous credit tool to meet several life necessities. These loans are also speedily approved by lenders as they are secured loans.
Several financial institutions offer attractive terms on loan against property. To benefit the most from these financing tools, you must apply correctly. There are certain factors you should know before applying for a loan against property. Start with a proper idea about loan against property eligibility criteria in detail.
What Are The Eligibility Criteria For Loan Against Property?
Eligibility Requirements for Salaried Applicants –
- 33 to 58 years of age.
- A salaried employee in a public sector, MNC, or a private company.
- A residing citizen of India.
The above are the parameters that all applicants must meet. Additionally, there is other loan against property eligibility criteria that a salaried applicant must fulfil. For example, He/she must earn a minimum monthly salary of Rs. 25,000. Also, some lenders may require work experience of at least 3 years or more.
Eligibility Criteria for Self-Employed Professional –
- A self-employed loan applicant can be as young as 25 years of age. The maximum age limit is 70 years.
- He/she must produce proof of a regular source of income from his or her business.
Additionally, there are some other requirements a self-employed borrower should fulfil. Many lenders may require at least 5 years of business vintage from an applicant to apply for a loan against property successfully.
A CIBIL score of around 750 is sufficient for both salaried and self-employed applicants for a loan against property India. Lower scores may also be eligible albeit not for the best terms on offer from lenders.
What Kinds Of Properties Can Act As Collateral In A Loan Against Property?
After a borrower meets all eligibility criteria, the lender will assess the market value of the property to be mortgaged. Assessing the borrower’s capital is one of the crucial ways of how a loan against property is processed.
Following properties can be mortgaged for a loan against property –
- Lenders prefer residential and commercial properties as a mortgage against the amount.
- Many lending institutions also grant loans against industrial property.
- Lenders will also consider rented out and vacant properties but will charge higher interest rates on these.
- The property that a borrower mortgages as security must be located within the lending entity’s locational limits. Also, the borrower must be able to produce the necessary construction plans.
After a borrower meets all eligibility criteria, the lender will assess the market value of the property to be mortgaged. Assessing the borrower’s capital is one of the crucial ways of how a loan against property is processed.
Following properties can be mortgaged for a loan against property –
- Lenders prefer residential and commercial properties as a mortgage against the amount.
- Many lending institutions also grant loans against industrial property.
- Lenders will also consider rented out and vacant properties but will charge higher interest rates on these.
- The property that a borrower mortgages as security must be located within the lending entity’s locational limits. Also, the borrower must be able to produce the necessary construction plans.
Eligibility on Income
Before you apply for a loan against property, you will need to present sufficient documents that prove your monthly income. Lenders always look at your creditworthiness and monthly income before granting the credit. To determine loan against property eligibility, most lenders consider about 60% to 70% of the borrower’s net monthly income left after taxes and deductions.
For business owners, the income of the company, partners, and proprietorship are considered. One can also add income from other sources like rent and interest from fixed deposits to increase eligibility.
Documents Required
You should know about all loan against property documents required so that you can arrange for them ahead of time. Thankfully, most financial institutions, including NBFCs like Bajaj Finserv, require minimum documentation during processing and approval of credit.
They also bring you pre-approved offers that make the entire process of availing a loan quick and time-saving. Pre-approved offers are available on several financial products, including unsecured credits like personal loans, business loans, secured advances like home loans, etc.
Here are the documents you must furnish to apply for a loan against property –
- Latest salary slips for employed individuals and Income Tax return statements of at least the last 3 years for self-employed applicants.
- PAN/Aadhaar/Voter card.
- Documents of the property to be offered which includes registered sale deed, conveyance or lease deed, or past sales deeds chain, or approved building plan from Municipal Corporation.
Additional Read: How to Avail Loan Against Property in Chennai?
Now that you know all about the eligibility for a loan against property, you can apply for it correctly. With appropriate preparation, you can assure your application approval.
