The major decisions in life like wedding, education and constructing a house etc. require a great deal of money. There are number of ways to fund these requirements and one of them is to get a loan against property which can be availed by mortgaging property. It is popular among borrowers due to its various benefits and easy processing. The fulfillment of certain criteria is required to be eligible for a loan. Let us examine how some factors affect the loan against property eligibility while borrowing.

→ Age of Applicant: It is one of the most basic eligibility criteria to consider while availing a loan as it determines your repayment capacity. If the applicant is above 60 years old or getting retired soon, the chances of rejection of the application increases. It is always advisable to go for shorter tenure or get co-applicant to avoid missing EMIs.

→ Employment: The professional status and job stability are the key factors for any individual to sanction a loan for all the lenders. The number of years, one is associated with the firm and the monthly salary is assessed to ascertain the borrower’s capability to pay back the loan. If you are prone to switching the jobs, it can leave a negative impact on your financial stability and the chances of approval get decreases.

→ Source of Regular Income: A stable and a sufficient source of income is the important criterion for a lender to sanction an application. The borrower should maintain a stable job or business to earn a stable income if he/she want to “Apply For Loan against Property“ as it determines his/her ability to repay the loan. In case, if the loan EMI exceeds 60% of the monthly income of an applicant, the application gets rejected.

→ Credit Score: This score reflects how effectively a person has been paying his existing EMIs and credit card bills. Most of the lenders look at an applicant’s credit history before approving a loan. Any defaults on the existing loans or late bill payments are reflected in your credit report and can impact your loan application.

→ Slips of Income Tax Returns: However having a stable job and high monthly salary is good but insufficient ITRs can also lead to rejection of loan application. The slips of Past ITR for last 2-3 years ensure a steady flow of income and increase your chances of approval.

→ Property Papers: Either you “Apply For Loan against Property Online“ or offline, the submitted property documents should needed to be authentic and valid. The basic property documents include registrations, building plans, permissions etc. If the property involves some legal turfs or the papers are not in proper order, the application is likely to get rejected.

If these following factors are taken care of and one respects the responsibilities associated with it, loan against property is one of the easiest option to tackle your financial needs. ShubhBank offers competitive rates of interest, flexible tenure, convenient EMI options, low processing fees and hassle free processing on loan against property.

Loan against property is much like any other type of loan in which lender promises you to give the funds by keeping your commercial or residential property as collateral. This concept is gaining popularity among loan seekers as large sum of money gets easily arranged by this. Loan against property offers great features such as easy documentation, faster approvals and flexible repayment options. It means one can apply for a loan from any lending institution by extending his/her property as a security. This is type of mortgage that involves a ‘transfer of interest’ and the ownership of the collateral remains with the borrower. Here in this article, we will tell you about what are the essentials of “Loan against Property“ and why it is attractive as compared to conventional loans. Mortgage loan is convenient as it offers higher loan amounts at discounted interest rate accepting both residential and commercial properties as security. Its major benefits are:

• Large quantum can be financed.
• Lower rates of interest as compared to other loans.
• Longer tenure resulting in low EMIs.
• Efficient financial tool for debt consolidation.
• Multipurpose use either personal or business.

The lender may also ask for KYC documents to validate the eligibility criteria which may consist of:
• Address proof.
• Identity proof.
• Property Papers(Residential/Commercial/Industrial/Plots).
• Salary slip if you are salaried.
• Certified financial statement for last 2 years if you are self-employed.

The approval of loan depends upon borrower’s credit score along with other factors such as age, income, the number of dependents, assets and liabilities. Once you “Apply For Loan against Property“ the lender will evaluate your eligibility depending upon given factors and luckily, if get approved for loan, the amount is disbursed in full or in installments in the bank account of the borrower. One can have choice to pick the type of interest rate either fixed or floating. The quantum of loan extended to the borrower is evaluated on the market price of the property, you pledged to the lender. It is important to keep the fact in mind that every lending institution always holds a certain amount of money and disburse a maximum of 70% of the market value of property. This ensures the lender against any cyclical fluctuations is real estate prices or in case, borrower default on installments.

Loan against property is great financial tool to meet your personal and business needs as there is no restriction on its usage. Many people use mortgage loans for funding children education in abroad, to buy or build a second property or even for business purposes. Putting your property at stake is a serious decision, so go ahead for loan after comparing the different lenders on their websites as many of them offer online loan against property with great benefits and features. The LAP should not be used as risk capital because it has high chances of losing your property to lender, therefore, apply it only when you know that you are able to pay back the loan amount in the fixed period.