loan against property eligibility

5 Factors That Affect Loan Against Property Eligibility

A loan against property is an excellent option when you need cash at very low-interest rates. LAP loans are secured, and hence you will have to provide a property as collateral. The financial institution will offer you quick loans to ease out the emergency. 

Will I Be Eligible for a LAP Loan If I Own Property?

No! Your eligibility for a property loan depends on certain factors, and knowing them will help you understand and make amends before availing of the loan.

  1. Current Employment Status 

Your present employment status determines your financial stability to repay the loan. The lender will consider your cumulative income from all sources to assess your financial situation. 

  1. Credit Score

Lenders sanction the loan only after they ascertain your credibility. There is no better measure of credibility than one’s credit score. If you do not meet the lender’s criterion for credit score, then your application is most likely to be rejected. Credit scores ascertain that you are a risk-free borrower. A credit score above 750 can help you get the loan sooner and get a lesser property loan interest rate.

  1. Insurance of the Property 

If the property is secured in terms of an insurance policy, the lender will consider your property secured and trust you. 

  1. IT Returns

You will be asked to furnish IT return documents by most lenders. If a Chartered accountant ascertains the last three to four years, the tax files will prove to the lender that you have a steady cash flow.

  1. Loan Tenure

Most lenders reject shorter loan tenure after ascertaining your repayment capability based on your average monthly income. Calculate your EMI using an EMI calculator to apply for an affordable EMI where you can easily make timely payments. Choose a comfortable tenure that will assure your lender that you will not default on the loan instalments.

LAP loans offer the cheapest interest rates starting from 9%*. You can easily avail of a maximum loan amount of up to 5 crores (up to 70% of your property’s market value) by pledging a property of the corresponding high-value property.

Must Read: NEVER MAKE THESE MISTAKES WHILE OPTING FOR PROPERTY LOAN

Here Is Everything You Need To Know About LAP Eligibility

what-determines-property-loan-approval

Getting a loan against property isn’t difficult, provided you fulfill each of the diverse eligibility criteria. However, you need to understand that the factors determining eligibility aren’t complicated for a LAP courtesy of the secured nature of the same.

In the subsequent sections, we shall take a closer look at the diverse loan against property eligibility factors, thereby helping you apply and get approved, sans hassles:

  1. The first factor is to establish ownership of the property which gives you the right to put up the same for a mortgage. As a matter of fact, you cannot procure LAP for rented establishments.

  2. There should be any discrepancy or dispute related to the property as proposed by the sales deed.

  3.  Clear and airtight documentation becomes all the more important for commercial establishments.

  4. Despite this being a mortgage loan, you should have a steady source of income to qualify for loan approval. This criterion concerns your repayment capability, depending on the tenure of the concerned credit line.

  5. A good CIBIL score is also necessary to establish loan eligibility. In case you want to procure a credit line, consider pushing your CIBIL score to at least 750 for improving your chances of getting approved.

In addition to these eligibility factors concerning property loan, you must also ensure minimum to zero liabilities for being eligible for an extended line of LAP credit. 

However, it is necessary to check with the concerned lender for additional eligibility metrics, if any. 

Must Read: All You Need to Know About loan against property in India