Loans are an excellent way to raise money in a short time for some essential purpose. Availing loans against property is an even better choice owing to the extra secure and malleable it is. The amount of money depends upon the total value of the property you own or want to keep as collateral.
While it can be availed by anyone that needs the money, you need to fulfill specific requirements first. Loan against property is a better option in case you need the money and you own a property. But you have to check eligibility before applying for the loan. The factors that majorly affect your eligibility for applying for a loan against property are listed below.
Factors that Affect Your Eligibility for a Property Loan:
The lending institution won’t lend money to someone too young or too old, as there isn’t enough assurance of getting timely payments of the loan. While someone too young might not have a job and, therefore, enough income to pay the lending institution, people that are too old might need their earnings for medical expenses and, thus, might not be able to make the loan payments.
The age requirement for self-employed people is approximately 25-60 years, while salaried professionals need to be in the range of 33 to 55 years.
- Professional Status
Your professional status and the stability of your job are inarguably the most critical aspect a financial institution takes into account before giving you a loan. You have to either be a permanent employee of an organization or be a self-employed individual if you want to apply for the loan.
If you’re found to have an itch for changing jobs now and then, you’re unlikely to be eligible for the loan.
Your salary is yet another crucial aspect that the lending institution cross-checks before lending you a loan against property. You must have a stable job with a steady monthly income that would be capable of paying the loan back in the future.
If the loan’s EMI takes up more than 60-70% of your monthly salary, the lending institution won’t offer you any loan.
- Credit Score
Your credit score speaks all about your payment abilities. It indicates how you have been paying your card bills and previous loan EMIs. A person with a credit score of 700 or more is considered to do well and is eligible to apply for the loan.
Financial institution employees go through history and look for any bounced checks or delayed bill payments. In case they find any such backlog, it is sure to drastically impact your chances of getting a loan from the lending institution.
- Documents of the Pledged Property
If you want to apply for a loan, it is compulsory to have legit documents. You must have the valid documents of the property, your bank account, your ID proof, etc. to fulfill the loan against property eligibility criteria. Make sure to double-check all your documents before submitting them for the loan process. If any of them are not in order, your loan application is prone to be rejected.
- Income Tax Returns
Having a stable job and good monthly income won’t be enough alone to get you the amount you want from the lending institution. An ITR filing history in the previous 3-4 years would ensure the lending institution of your steady income. Therefore, anyone with a habit to file ITRs on time can easily apply for a loan against property.
Applying for a loan against property might seem a tedious task. However, if you have all the genuine documents and are in all-ways capable of paying the lending institution on time, applying for a LAP would be a quick process.
Make sure to always pay your credit card bills and EMIs on time to maintain your credit score as well!