An online loan against property, as suggested by the name, is a kind of secured loan option wherein property must be mortgaged as security or collateral. This is distinct from a home loan, as it is a kind of loan used for financing any of your personal requirements, may it be a child’s higher education, marriage, fund mismatches for medical treatment etc. As it is secured in nature, a Loan Against Property Without Income Proof may be offered by a few of the lenders. However, note that many lenders still may require you to provide your income documents to be thoroughly assured about your repayment capacity.
As the loan against property is secured in nature, hence the rate of interest is lower than the unsecured credit options. Moreover, such loans may be used for high proceeds based on your mortgage size and repayment schedule, even can be as high as twenty years. Nowadays, loan against property can be taken up quickly at zero hassles. This is because the lenders have highly become consumer-centric and have started making instant disbursals on priority.
Almost anyone with a property can place an online application for a loan against the property. However, specific parameters must be met before that. In the case there are certain minor discrepancies, an individual still will be able to avail of a loan but at an increased rate of interest. Here, in this blog, covered are the crucial and commonly used parameters to decide loan against property eligibility –
Age
Generally, lenders need that individual to be between the ages of 22 and 60 years. A lower age limit of 22 years is placed to make sure that the individual is mature to be able to take up a loan against property. Moreover, individuals within the age group of 18 are not adults and are not allowed to enter into such loan deals. The next reason for keeping a reduced limit of around the age of 23 is to offer adequate individual time after entering the phase of adulthood to form a stable credit history and income.
The higher limit is 60 years of age for applicants as at this stage, the loan usually matures, and so thus, the borrower reaches retirement. For instance, if you avail of a loan at the age of thirty years with a repayment tenure of thirty years, then the loan against the property will mature when you are 60 years old. An upper limit is placed to make sure that the individual is still of working age and has a constant income source at the loan maturity time. This makes it simpler for the lenders to ensure that that individual will repay the loan amount in its entirety.
Income
Almost every bank lender assesses the applicant’s income source. There might be distinct rules for income that may apply for the self-employed and salaried, but the major parameter is that the applicant should hold a regular income source that is adequate to service the loan against the property option. In the case of a salaried applicant, the lender will generally ask for salary slips for the last 6 months. Such salary slips can be used by lenders to make sure that the applicant has a stable job and to ascertain how much earning an applicant gets. If the applicant is self-employed in nature, then the lender might ask for the financial statements of his bank. The lender can use this detail to ascertain whether the self-employed individual has a regular income source and for how long he has had the income. If the income period is extremely short, then the bank might turn down the loan against the property application.
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It is not sufficient for applicants to have an income source. The applicant must have an income source for a sufficient time span. This makes sure that the applicant is unlikely to lose the income source. Moreover, in the case of an SME applicant, the lender might ask for the audited financial statement of the business to make sure it can simply serve the loan.
Property that is to be mortgaged
The most crucial parameter for the loan against property, as suggested by the name, is property which is mortgaged. Lenders agree with both commercial and residential properties and, in specific cases, agricultural properties even. The lender may generally be willing to process the loan amount that is equivalent to 70 to 80 per cent of the property value that is mortgaged. Note that the eligible loan proceeds may be higher for commercial properties than residential properties.
CIBIL score
CIBIL score refers to credit score. Basically, credit score gets accorded to those to ascertain their credibility. The higher the credit score, the more likely it is that they will be able to repay the loan against the property. CIBIL score basically ranges anywhere between 300 and 900. There are various parameters that decide your CIBIL score; a few of them involve your income level, credit history, net worth etc. Generally, lenders just offer a loan to applicants with a minimal credit score of 750 and above. A credit score of 750 and above is thought to be good by the lenders as it shows the responsible credit behaviour of the applicant. A high score even boosts the chances of availing of a loan due to lower credit risk.
Documents needed
Before processing the loan against property, applicants must provide a wide range of documents as proof to the bank. Even though all lender has different conditions, there are basic documents that all lenders will ask for. These documents include –
- Income tax returns for the past 2 years
- Copy of the documents of properties that are mortgaged
- Latest salary slips or the bank account statements
- Address proof like the utility bills etc.
- Identity proof like the Aadhaar card or PAN card.
While the loan is processed, the loan officer might ask for additional loan documents even. In case of any discrepancies in the documents, the application may be cancelled. Thus, ensure to provide all correct information when filling up the application form for a loan against property.
