Check your Loan Against Property Eligibility to Avail Quick Benefits
According to a report, India’s loan against the property market is predicted to grow at a 14% CAGR in value terms by 2022. This growth can be attributed to the RBI’s decision to maintain the repo rate at 4% leading to an affordable interest rate on LAP.
The availability of substantial credit and usage flexibility has led to the demand for the said credit. However, individuals need to fulfill the loan against property eligibility to avail of the said credit successfully.
Loan against property eligibility parameters
Lending institutions set simple eligibility terms against a LAP due to its secured nature. Fulfilling these parameters will help a potential borrower gain substantial credit at feasible terms.
Moreover, it establishes an individual’s repayment capability and reliability. Individuals should know that eligibility norms can differ from lender to lender depending on their policy.
However, the common loan against property eligibility requirements are as follows:
Salaried individuals need to fulfill these criteria-
- An applicant must fall in the age bracket of 28 to 60 years
- He/she should have Indian citizenship
- Individuals should be working at a private, public or MNC for at least three years.
Self-employed individuals can qualify for a loan against property eligibility criteria by:
- They should maintain a steady income flow
- An applicant must be between 25 to 70 years of age
- Individuals should have Indian residency.
Apart from the mentioned parameters, potential borrowers should maintain a 750+ CIBIL score and credible repayment history. This will naturally leverage an individual’s LAP eligibility.
However, simply fulfilling the mentioned requirements won’t suffice loan approval. Individuals have to submit valid documents to support their loan eligibility.
What are the documents required against a loan against property?
The documents required against a LAP are basic and easy to arrange. A lender scrutinizes these papers before approving the loan.
Some of the common loans against property documents include-
- Salary slips and bank account statements of least three months for salaried
- A self-employed applicant has to submit a bank account statement of at least six months
- KYC papers
- Adress and identity proof
- Papers proving the property ownership
- IT tax returns.
It is imperative to know that lending institutions may require the submission of additional documents. In this regard, consulting a lender regarding the list of documents needed to apply for a loan against property will help streamline the entire process.
Apart from fulfilling the loan against property eligibility and documentation, individuals can check the factors that help improve the chances of credit approval.
What are the factors that impact the LAP eligibility?
A potential loan against property borrower can check the mentioned factors before making a credit application:
A lending institution conducts a hard inquiry when an individual makes a loan application. They check the credit report and repayment history of an applicant before approving a loan. Ideally, maintaining a 750+ CIBIL score will help improve mortgage loan eligibility.
One can practice ways, such as making timely repayments, part-prepayments, avoiding multiple loan inquiries, etc., to improve creditworthiness.
- Property value
A lender also assesses property value before disbursing a loan. Depending on the results, a lending institution processes the loan. This factor also influences the loan against property interest rate.
Ideally, a property situated in a prime location and surrounded by basic amenities, such as schools, railway, market, etc., has a high loan value. Keeping such property as collateral will naturally increase a borrower’s loan eligibility.
These borrowers are liable to gain customized offers and quality services from a lender’s end. For instance, many financial lenders extend pre-approved offers that make the loan application simpler.
Such offers are levied on financial products like a home loan, LAP, and likes. However, this property should be void of any legal turf to facilitate easy loan approval.
These are some essential information on a loan against property eligibility that a potential borrower must check beforehand. By assessing the requirements, one can determine their eligibility and work on the factors that require improvement.
- Stable income
Though a LAP is a secured credit form, lending institutions are always at risk of facing defaulters. This is a reason why lenders prefer applicants with a stable income source and employment.
Young salaried applicants can easily substantiate their repayment capability due to their workable years.
In this regard, a retired individual can disclose their additional income sources, such as earnings from rents, investments, interest on savings, etc., to improve their loan eligibility.
This will help them leverage the equity of their property and gain substantial funds for big-ticket expenses without hassle.