While a secured loan, such as a loan against property, may seem like a better alternative to an unsecured loan, one must remember that the asset alone is not adequate to get a borrower a hefty sanction cost-effectively. The borrower’s credit history, income, and additional factors also contribute to how affordable a loan against property is likely to be. To embark on a hassle-free journey from application to disbursal, one must keep the below things in mind.
Borrowers Should Select a Lender After Thorough Comparison
Every lender has in place guidelines based on which they grant a loan against property. To qualify for a loan against property, you must satisfy the loan against property eligibility terms. Further, for a cost-effective loan against property sanction, a borrower must compare multiple lender offerings. It is easier to do so online via aggregator websites.
Another alternative is to use a loan against the property EMI calculator since it’s best to compare your interest outflow in the case of each lender. You must also pay attention to any hidden terms and conditions and go through first-hand reviews. This could help you select a trusted lender that can sanction a substantial loan on affordable terms.
Borrowers Should Check CIBIL Score before Applying
Your CIBIL score reflects your repayment history, creditworthiness, and present debts. This is the reason why any financial lender looks at your financial score and credit history in detail before approving a loan against property sanction.
So, you must prove your financial worth with a good income and submit a loan application when you have a credit score of 750 and above. This is especially important since encountering a rejection on a loan against a property application owing to a low credit score is going to bring down the score further.
Borrowers Must Learn More about Interest Rates and Other Hidden Charges Before Applying
The interest rate at which you will service your loan against property will determine the affordability of the loan. To keep a loan against property's EMIs pocket-friendly, borrowers must try for a nominal interest rate with no hidden charges.
You should also note that lenders offer the sanction based on the asset pledged as security. This indicates that not only can a borrower receive a hefty sanction when they pledge a property that has a high value and is constructed by a reputed builder, but they can also benefit from financing on lower rates of interest.
Borrowers Should Weigh Their Needs and Chalk Out A Repayment Plan before Applying For a LAP
Your financial income and obligations should be your baseline considerations when thinking of how much to borrow. In other words, you should assess your present income along with current EMIs and additional regular expenditure before deciding if you can afford a loan against property.
It is always a good idea to apply for a loan against property only you feel it is a viable solution economically. Once you have identified how you are going to repay the loan against property, either via investment returns, salary alone, or other means, you can go ahead and apply.
How to Apply for a Loan against Property without Income Proof
Lenders ask for income proof even when you submit your property documents as collateral to measure your capacity to repay the loan promptly. But in the case of borrowers who are freelancers or currently unemployed and cannot provide income proof, the below tips may be helpful.
Tips on How to Apply for Loan against Property without an Income Proof
1. You must try to elaborate on their income to a lender representative
2. You must keep track of your savings
3. You can opt for a lower Loan to Value (LTV)
4. You can try applying with a co-applicant
The borrower can check the loan against property eligibility by using one of the calculators available online.
Loan Against Property Documents Required
Some of the documents typically required for a loan against property include:
For Salaried Individuals:
Proof of residence (any of the following)
• Ration Card
• Telephone or electricity bills
• Voter's ID
Proof of identity (any of the following)
• Voter's ID
• Employer's ID
• Aadhar Card
Proof of income
• Passbook or recent bank statements
• Pay or salary slips for the previous six months
• Form 16/Income tax returns for the previous two years
Property documents
• Property-related documents for the property to be pledged
For Self-Employed Professionals/Individuals:
Certified financial statements for the last three years
Proof of residence (any of the following)
• Ration Card
• Telephone or electricity bills
• Voter's ID
Proof of identity (any of the following)
• Voter's ID
• Employer's ID
• Aadhar Card
Proof of income/business continuity
• Passbook or recent bank statements, showcasing business continuity for the last 5 years (ideally) and steady income on a regular basis
• Income tax returns for the previous two years
• Document of business ownership, such as partnership agreement, and registration certificate
Property documents
• Property-related documents for the property to be pledged
The Final Word
Before availing of a loan against a property, you must evaluate monthly installments, calculate interest charges, and choose a suitable time frame to repay the loan amount. For this, you can simply make use of a loan against property calculator, which gives accurate results.
A loan against property interest rate calculator is generally a free tool available online on lenders’ websites, helping calculate the monthly installments a borrower will need to pay for a specific loan tenor. By entering some basic details, one can view deals that have been customized for them and enjoy instant, hassle-free loans against property approval. If you are in want of a loan against property, contact Bajaj Housing Finance today, one of the leading lenders in the market today, for a quick and hassle-free application.
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