Loan Against Property: Eligibility & Documentations

There is hardly anyone who does not receive a cold-call from the various banks’ DSO or the financial institutions trying to offer a loan. Be it a personal loan, a housing loan, loan against property or a loan against property without income proof. However, there are options to be considered, that needs your attention. You need to be well informed about the interest rates, tenure of repayment of the loan, EMI; the total principal amount and total interest charged, documents required, additional charges towards loan pre-closure if any, etc. 

Loan against property

Loan against property is available from various banks which charge an interest rate for the loan. The interest rates of these banks are different and one should compare the best loan offer from a particular bank.

Housing loan eligibility

You can get a loan against property provided you furnish following documents:

For salaried individual:

• Latest salary slip
• Bank account statement for the previous 3 months
• PAN/Aadhar card
• Address proof
• Copy of the documents of the property to be mortgaged
• IT returns

For the self-employed:

• Bank account statements for the past 6 months
• PAN/Aadhar card
• Address proof
• Copy of the documents of the property to be mortgaged

You can avail a loan against the property if you meet the following criteria. The Housing Loan Eligibility is subject to certain terms and conditions:

• You should be between 33 and 58 years of age
• You should be a salaried person in an MNC, a private organization or a public sector company.
• You should be a resident of India

Self-employed persons:

• You should be between 25 and 70 years of age
• You should be a self-employed person with a regular source of income
• You should be a resident of India residing in the following cities:

Hyderabad, Chennai, Bangalore, Kolkata, Delhi, Mumbai, Pune, Thane, Ahmedabad, Vizag, Surat, Udaipur, Indore, Aurangabad, Cochin or Meerut.

Interest for Housing Loan

These banks are offering the home loan at the lowest interest rates for individuals drawing salary.

Property documents Required for Home Loan

• Aadhar Card
• Valid Passport
• Voter Card
• A letter from the person with public authority/ public servant, certifying the applicants identity and residential address
• Copy of Latest Electricity or other Utility bill
• Copy of Rent agreement executed on non-judicial stamp Paper.
• Bank Statements of a nationalized/ commercial bank, where the applicant’s address is mentioned.

Loan without income proof

Banks want income proof to determine your repayment capacity being a borrower. If you don’t have a regular source of income, the loan will be challenging for you. A stable income is an important parameter for ascertaining the exact amount of loan that can be sanctioned. Your income documents are verified to know the creditworthiness of yours. If you want a loan without income proof, it is possible but the procedure goes a bit complicated. You may have to fulfil some additional criteria. Or, you may go for a type of loan that doesn’t require much documentation or proof. You may seek a lesser amount of loan that will enhance the probability of getting your loan sanctioned.

Which bank is best for a loan against property?

There are no easy answers to this question. It depends on how many banks you have explored to know the details of interest rate, documents required, terms and conditions, loan tenure, sanctioning time and other details. After a thorough search, only you can pin down the bank for applying for a loan.

What is the tenure for a Loan against Property?

You may need a high amount of loan for your business or personal reasons. Loan against property from some financial institutions can be suitable for you to find the financial solution. You can avail a loan up to Rs 3.5 crores. You should choose the loan tenure as per your finance available and repayment capacity per month. The repayment tenure begins at 2 years and can go up to 20 years.

What security is required for mortgage loan approval?

You will prefer a loan against property more readily than other options because it is widely preferred by many due to its simplicity and quick sanction. This loan can be used for multiple purposes. You can get up to 90% of your property’s market value as a loan. You have to provide any of the following as collateral:

• Residential property (both self-occupied and rented)
• Commercial property (both self-occupied and rented)
• Residential plot vacant
• Industrial properties

You should fulfil eligibility criteria regarding age, employment status, and so on and submit the documents to get the loan approval.

For what can a Loan against Property be used for?

It can be used for healthcare, medical problems, higher education, wedding, business, marketing and sales promotion, a business trip abroad, and so on.

Who can be a Loan against Property co-applicant?

They can be brothers, sisters, spouse, any of the parents, and unmarried daughter.

Home Loan Eligibility Criteria

• Present Age and Remaining Working Years: The age of the applicant decides the eligibility for home loan. The maximum tenure of the loan is normally not more than 30 years.
• For Salaried Individuals Age Limit: 21 – 65 years.
• For Individuals who are Self-Employed, Age Limit: 21 – 65 years.
• Minimum Salary for Eligibility: Rs. 10,000 p.m.
• Minimum Income from business: 2 lac p.a.
• Maximum Tenure for which loan can be repaid: 30 years.
• Financial Position: The applicant(s) current and future earning capacity has a considerable bearing on deciding the amount of loan that can be sanctioned.
• The applicants Credit History and CIBIL Score: A regular repayment record, without defaulting on repayment increases the loan approval scope.
• Other Financial Liabilities: Existing liabilities like car loan, credit card loan/debt, etc.

Also read: Home Loan Transfer Process: Know all the details