Availing a Loan against property is one of the easiest ways to fund various financial requirements, like business expansion, education needs, medical emergency, etc. in a hassle-free way. Through a loan against property, you can easily avail a high value loan by keeping property as collateral and fulfil your financial needs. However, it is only possible when you are eligible for it.
Various factors can affect your eligibility for a loan against property. It is essential to be aware of these for a hassle-free loan application.
Age
Age is a crucial determinant of your loan eligibility because it indicates your repayment capacity. Banks have fixed minimum and maximum age criteria for application approval. The minimum age for a loan against property is usually 21 years. The maximum age varies from lender to lender. However, if you have reached the retirement age or are close to retirement, your loan application is likely to get rejected.
Table of Contents
Income
Lenders ask for your salary slips or tax returns to ensure that you have a stable income source for the repayment of the loan. For the same reason, lenders prefer to give loans to individuals who have secure jobs with assured monthly income like government staff, CA, Doctors, professionals and PSU employees.
Credit history
It is important that you have a high credit score if you want to avail a loan against property. Usually a credit score of 700 or above is considered to be a good one in order to avail a loan. If you have a poor credit score, you might face difficulty in getting your loan approved.
Job Profile
Lenders prefer approving loan applications of those who have a stable job profile. Your job security is an assurance for the lender that you are capable of loan repayment. It is important that you stay at a job for a longer duration. If you have switched jobs frequently, the lender might not approve your loan application.
Property Documents
The property documents that you submit to the lender should be genuine and authentic. Lenders could decide against approving the loan if there are any discrepancies or legal complications in the documents. Property documents like building plans, registration certificates, etc. should be authorized and approved by the relevant authorities.
Property Insurance
If you want to get your loan against property application approved, ensure that you have property insurance in place. Having your property insured is beneficial both for you and for the lender as it reduces financial risk for both.
Past Loan Applications Record
Lenders check your credit history to ensure that you pay EMI on a timely basis. But they can also check your credit report to know if you have applied for a loan earlier. A loan application rejection in the past can reduce the chances of your loan against property eligibility. A negative remark in a credit report reduces the credit score and your loan eligibility. Therefore, make sure to check your credit report before applying for loan against property.
It is a good practice to maintain your financial habits in line with the above-mentioned factors, wherever possible. If you need a loan against property in the future, the effort will pay off in the form of a swift approval and possibly even a competitive interest rate.