Life is unpredictable and more often than not, many of us find ourselves in a crisis that you haven’t or couldn’t have prepared for. Be it medical emergencies or personal aspirations, such as sponsoring your child’s further studies or starting a new business, everyone requires a large amount of funds every now and then
To fulfil these goals, loans are always an option, and of the many loans available, a loan against property presents a lucrative deal. A loan against property is a credit instrument that enables you to access a large amount of funds in a matter of days. To avail of this loan, you need to keep your property or asset as collateral with any of the lending institutions in the market today. But before you go ahead and apply, follow this guide to know about loan against property documents required, eligibility criteria, and other related terms.
Why should you opt for a loan against property?
A loan against property (LAP) is a secured loan acquired against the mortgage of a property. The property or asset can be of a residential, commercial, or industrial nature. If you avail of this loan, you get to retain the ownership of the asset. Only if you fail to repay the principal with interest, the lender confiscates the property. You can leverage your asset in this sphere because:
- The loan to value amount offered is high. Lenders offer 50-70% of the market value of the asset as a loan.
- The funds can be employed for both personal and business use.
- It comes at low interest rates. In comparison to other financing tools, it is the most affordable and convenient choice.
- Lending institutions offer a significantly long tenure for loan repayment. It can range up to 20 years.
Estimated to grow at a compound annual growth rate (CAGR) of 14% till 2026 in terms of value, LAP is quite popular among the Indian populace.
Loan against property: Eligibility criteria
To acquire a loan against property (LAP), you should fulfil certain conditions. The loan against property eligibility criteria include:
- The applicant should generally be between 18 to 65 years of age.
- The applicant can be a salaried employee or self-employed.
- Applicant’s net annual income should 1.50 lakh INR at least.
- A minimum credit score of 750 is desirable.
Loan against property: Documents required
To get hold of the loan without much trouble, you need to submit a host of documents. The paperwork forms a vital part of the application process. It varies for salaried and self-employed individuals (professional or non-professional).
Salaried individuals have to furnish these important documents:
- Application form with a photograph affixed on it
- Evidence of current residence in the form of utility bills, Voter ID Card, Ration Card etc.
- Identity proof in the form of the Aadhaar Card, Voter ID Card, Passport etc.
- Salary slip of the last three months
- Form 16
- Bank statements of the past six months
- Documents concerning the pledged asset
For self-employed individuals, the documents which need to be submitted include:
- Application form with the individual’s photograph attached to it
- Aadhaar Card, Voter ID Card, Passport etc. to uphold the authenticity of identity
- Proof of current residence in the form of utility bills, Voter ID Card, Ration Card etc.
- Self-employed professionals need to submit Income Tax Returns, Balance Sheets and P&L statements of the past three years
- Businessmen need to hand over a business profile, income Tax Returns, Balance Sheets and P&L statements of the past three years
- Educational qualification certificates (for professionals)
- Evidence of property or asset ownership
Once you furnish the documents, the lender will examine the authenticity of all the paperwork. A representative may pay a visit to survey, inspect, and estimate the value of the property. After all these formalities materialise, the loan gets disbursed within 2 to 3 days. You can then utilise the funds to achieve your objective.
Loan against property EMI calculator
The loan against property interest rate calculator is an online tool that helps you make a rough estimate of the EMIs based on the interest rate. It computes and gives accurate results to allow you to plan the repayment accurately. With a better understanding of the EMI amount, you will be able to streamline your expenses. You just have to enter the principal, rate of interest and tenure of the loan. The loan against property EMI calculator will then give you the desired results.
Loan against property’s documents required, eligibility criteria, and other prerequisites are not too complicated, and the procedure involved is unexacting. You can get hold of the requisite loan within a few days once the application is approved. Get in touch with one of the leading financial institutions, such as Bajaj Housing Finance, today to know more or apply.