Loan against property (LAP) is a secured personal loan and stands up to its name by providing you easy funds against your property that is held as collateral to the bank or a non-banking finance company (NBFC). Lenders loan you the amount depending on the value of the property and could be used as the borrower wants. Loan against property can be taken against commercial, residential or industrial properties. And only once you have paid off the loan do you get the property back. If not, the lender has the right to auction the property to recover the dues.
As its name itself suggests, a loan against property, i.e, a loan in exchange for property, is a loan that is either owned by the applicant or its guarantor, usually owned by the parent. In return for the value of the property. This property is mortgaged, which means that the documents and legal ownership of the property remain with the bank until the loan is repaid.
The money comes with no end usage restriction, so the borrowers are free to spend the money however they want, such as financing one’s education, wedding expenses, handling medical bills, and other family emergencies and personal needs. As good as it gets, you still need to fulfill the criteria to become eligible for the loan. These eligibility criteria help you to get guaranteed approval on the loan. And the most important thing is that the property on which you are availing for a loan must have registered on your name or family member. Hence, before applying for the loan here is a checklist that will help you for instant approval go through this.
Below Are The Standard Eligibility Criteria & Documents Required For Loan:
LOAN AGAINST ELIGIBILITY CRITERIA:
Here are the eligibility criteria required for the approval of the loan against property.
- You must be a residing Indian citizen.
- You need to be of a particular age group as per your lender.
- You should have a steady source of income, and for salaried individuals, especially, you should be working in an MNC, the public sector or a private company.
- You should have a credit score of 700 and more. They play a significant role in the whole process as they signify how creditworthy you are.
- You are only eligible for the loan as long as you own the property put up as collateral. You don’t have the authority over a place that you live in on rent or any unused piece of land.
- Keep the title of the property clear and marketable, meaning there should be no existing mortgage or loan that could affect the title of the property adversely.
- Make sure that your credit and repayment history are clean and have no faults.
- Location of the property you wish to mortgage matters. You would want to have it approved by the lender for smooth progress.
- You should have clear records and documents of both personal and the mortgaged property to avail loan against property.
The borrower needs to make sure to have all the documents asked by the lender in check and updated. Submission of wrong or faulty documents can jeopardize your chance at availing the loan.
- A recent photograph on the application form
- Proof of identity like Voter Id card, PAN Card, passport, driving license
- Address proof such as Ration card, PAN card, passport etc.
- Age proof such as PAN Card, Passport
- Bank statements of the previous 6 months
- Latest salary slips
- Form 16
- Income tax returns from the last 3 years
- Processing fee cheque
- Copies of all the documents of the ‘to be mortgaged’ property
- Audited financials of the last 2 years
There are different eligibility criteria for a salaried individual, self- employed or an SME. Various financial institutions provide customers with a convenient and transparent process. Theses loan against property eligibility criteria differs from financial institutions. With easy and quick loan disbursals, they make the customers a priority and offer customized loans to suit their needs. Their Loan against Property EMI Calculator helps you have a preview of your monthly budgets by determining the EMIs of your loan. If you match the above eligibility criteria and provide the correct required documents you will get guaranteed approval on the loan.