In India loan against property market is growing at a CAGR of 14% in value and will likely reach $857.87 billion by 2026. This credit usually accompanies substantial funds at low interest rates. Moreover, these loans come with no end-use restriction, which further attributes to their growing popularity.
Most financial institutions offer quick processing and disbursal for these loans as they are secure against collateral. However, it’s best to know the given loan against property eligibility criteria to ensure you get your loan application approved on the first attempt.
Factors that affect your loan against property eligibility criteria
Before applying for a loan against property, you should consider the pointers below to improve your eligibility.
When you apply for a loan against property, your lender will verify all the documents for the property you want to use as collateral. The documents include title deeds, approval from local bodies, building plans, environmental clearances, etc. Any discrepancies with these documents or legal hassles involved with the property could jeopardise your chances of getting a loan. Having this list of documents when you apply loan against property online will make the loan approval quick and hassle-free.
Age of the borrower
The borrower’s age plays an important role in securing any loan, including a loan against property. This is because lending institutions need to ensure that their borrowers have enough income to pay their EMIs regularly until the tenor ends. If you apply for loan whose tenor ends at near your retirement age, there’s high chance that will get reject. For most institutions, the maximum age for a borrower to extend their tenor is 60 to 65 years, depending on the employment type.
Stable income source
Borrowers need to have a stable and sufficient income to afford their loan repayment without trouble. Having a stable job or a business that provides a borrower with a steady income source is necessary to qualify for this loan. You can use a loan against property EMI calculator to determine if your monthly liabilities are manageable against your income. Usually, your loan application can be reject if EMI exceeds 60% of your monthly income.
Any lending institution will want to know about your repayment capacity and if you have a habit of regular repayments. Therefore, a borrower’s credit score affects the loan against property eligibility criteria. If you regularly make late payments, defaults, check bounces etc., it will result in you having a bad CIBIL score. With such a poor credit score, your chances of securing a loan could become slimmer.
Employment history and status
Most financial institutions will check your current employment status and salary to know if you can pay the interest rate on loan against property without being financially strained. They will also want to check how many years of association you have with your employer. If you have long history of frequently changing jobs, your chances of getting loan are low due to lack of job stability.
Insurance on your property
Having an insurance policy on your property makes it secured and increases chances of getting loan quickly. It reduce your risks in case unexpected circumstances and make sure you’re financially cover.
A long loan tenor can lower EMIs as the payments are spread over a long time. If the cost of the EMIs seems to be too high compared to your monthly income, it will probably get rejected. Hence, if you have a low income, you should apply for a loan with a longer tenor.
In case you fulfil loan against property eligibility criteria, you can easily get a loan approve in no time. Financial institutions also offer pre-approved offers for various loans like LAP, home loans, etc., to make the process even easier and faster. You can check your pre-approved loan offer by entering your name and contact number.
A loan against property is one of the easiest and comfortable funding options for most borrowers. However, the above factors will allow a borrower to get quick approval and the best terms to make loan repayment less costly.