Your life is a never-ending to-do list. Be it personal or professional, you are constantly trying to improve your way of living and certainly don’t want the lack of funds to put a full stop to that process. And this is precisely where Loan Against Property comes into the picture.
It is an ideal way of borrowing funds without any unnecessary restrictions. As the name suggests, your property can act as collateral for the loan. You can use it either for personal or business requirements; it entirely depends on the borrower.
It is considered as one of the fastest ways to obtain financial assistance. But there are various things like credit score, ITRs that affect your Loan Against Property eligibility.
The maximum amount of disbursement for a loan against property depends on the fair market value of the mortgaged property. Also, there are few eligibility criteria required to be fulfilled to avail a loan against property. Here’s a quick look at the same
1. Credit History:
It is one of the most critical factors on which an individual’s application for a Loan Against Property is judged on. The borrower’s credit score reflects his/her repayment capability. A credit score indicates whether the borrower will be able to make regular payments on their loan. Thus, it is necessary to maintain a good credit history.
2. Insufficient Property Documents:
The borrower must pay attention to the documents related to the property that needs to be mortgaged. One should check that all the documents are in order before he/she applies for a Loan against Property. This includes title deeds, building plans, approvals from relevant authorities, registration and so on.
3. Loan Tenure:
A longer tenure helps you to avail the loan quickly along with lower EMIs. In the case of low incomes, you can always opt for longer tenures as these loans have a lower tenure than a normal home loan.
4. Age of the Borrower:
The borrower’s age plays an essential role in determining the ability of repayment of the debt. The borrower must repay the loans before attaining the age of 65 years. If the borrower has reached the retirement age, then there are high chances of getting the loan application rejected. In such circumstances, you can try for loans with a shorter duration, which will result in higher EMIs.
5. Regular Flow of Income:
One of the primary factors is that the applicant must have a steady and consistent source of income which ensures that the borrower has a repayment capacity to manage to pay the EMI (Equated Monthly Installments).
6. Rejection of a Previous Loan Application:
Mostly, financial institutions and credit intermediaries keep a record of the loan applications that have previously been rejected. However, these vary from one lender to another, and each lender has their own internal policy to determine the creditworthiness and risk rating. If your loan is rejected, it will appear in your credit profile check, hampering your chances of getting loan approval. Thus, it is necessary to take an objective view of the situation and find out the reason for rejection and go about meticulously curing it.
7. Insurance of the Property:
Mortgage insurance covers the loan repayment decreasing the burden on your family. Also, it lowers the risk of the borrower in case of any unfortunate circumstances. So, it’s always advisable to avail mortgage insurance to safeguard your financial interest.
8. Delays in Repayment of Loans:
The lender can appraise your house loan eligibility based on who you are and what documents you present. The above reasons would help you to tick-mark your eligibility criteria for a loan against property.
You can also apply for Loan against Property at Shubham Housing Development Finance along with necessary documents handy to get quick approval.