What is Loan Against Property?
A Loan Against Property is a secured loan usually offered at a low interest rate against commercial or residential property by banks, NBFCs and housing finance companies. The amount of loan that could be sanctioned depends on the value of the property. A loan against property caters to personal requirements and is proffered to buy raw materials, machinery, equipment, debt consolidation etc. Loan against property can be availed against a self-owned piece of land, residential property, commercial property and rented residential property.
What Are The Features of Loan Against Property?
- Low-interest rates
- No hidden charges
- No prepayment penalty
- Interest on daily reducing balance
- Reduced loan tenures
- Cost-saving on EMIs
- Greater ease of loan repayment
What Is The Eligibility Criteria For Loan Against Property?
- Loan against property eligibility criteria:
- The applicant must be an Indian citizen
- He/ She should be at least 21 years old
- He/ She must have been employed by the current organization or should have been involved in any other business
- The applicant must have a good credit score
It varies from bank to bank. Tap the link and head over to the site of respective banks to check the eligibility criteria of availing loan against property:
What Are The Interest Rates For Loan Against Property? Loan against property interest rates:
Factors That Affect Loan Against Property Interest Rate Are As Follows:
- Types of the property mortgaged
- Profile and credit score of the borrower
- Tenure of the loan
What Are The Documents Required To Avail Loan Against Property?
Loan against property documents required:
- Income Documents
- Ownership documents of property
- Bank statements for the previous six months
- Processing fee’s check
- Employer’s ID card
- Loan application
- Address/ residence proof
- Occupancy certificate
- Approved plan copy and registered development agreement of the builder
- Payment receipts or bank A/C statement showing all the payments made to builder/ seller
- Salary slip/ salary certificate of last three months
- KYC
Should You Go For A Loan Against Your Property?
If you are a business owner who owns a house/commercial property, taking a loan against property could be a good idea since it is a good debt consolidation tool. The process is smooth, quick and trouble-free. Loan against property could be used for multiple purposes, to fulfil your professional or personal needs.
It also has many benefits like low interest rate and high tenure, low EMI, minimal documentation, quick processing of loan, no hidden charges and the property continues to be under the owner’s control and he/ she does not have to repay the whole loan to retain the ownership at any point of time.
There can be certain disadvantages like the property could be sold and since the economy is constantly fluctuating, the price of the property could rise or dip at any time which might fetch a lower loan amount than borrower’s expectations.
How To Avail Loan Against Property Without Income Proof?
It is quite a task to avail loan against property without income proof, it requires patience and exemplary convincing skills considering the competition in the market. Keep the following documents handy to avail loan against property without income proof:
- Passport-size photographs
- Processing fee payment’s cheque
- Bank account statements for the last 6 months
- Address proof (aadhar card, voter ID card, ration card, passport, utility bills)
- ID proof (voter ID, DL, aadhar card, pan card)
Tips to follow while availing loan against property without income proof:
- Consider peer-to-peer lending: Funds would be raised through crowd-funding which will then be disbursed with an interest rate to suitable borrowers.
- Choose lower loan to value: Try requesting the bank to let you choose a lower loan to value.
- Try to justify the reasons: For not being able to produce income proof, try convincing them so they could comprehend your situation well.
- Contact your relationship manager: Try building good relations with the appointed relationship manager who could use his/ her network to help you fetch a loan.
- Check your banking activities: Maintain the minimum balance amount in your savings bank A/C, it creates a good impression and adds to your credibility score.
- Apply with a co-applicant: It gives the borrower an opportunity to avail a higher loan amount and also provides assurance for the repayment of your loan amount.
- Explain your income source unambiguously to the officer: It is very important for the officer to understand your income details before visiting the property for inspection so, make sure you are able to convey it well.
Head over to https://triti.com/blog to get more details about availing loans hassle-free and with lesser paperwork.
