Most major steps in life
like marriage, education, building a house, etc. require a great deal of money.
There are several ways to fund these requirements and one such way is to take a
loan against your property; loan against property is a loan availed by
mortgaging property.

A loan against property or LAP is popular among borrowers due to its various benefits, easy processing being one of them. However, the fulfilment of certain eligibility criteria is required to be eligible for a loan. Let us examine some of the factors which could impact your eligibility when borrowing a loan against property:

Age of the Applicant

This serves as the most
basic eligibility criteria to consider when applying for a loan as it
determines your repayment ability. If the applicant is retired or will retire
soon, the chances of rejection of the application are high. It is advisable to
go for a shorter loan duration or get a co-applicant on board to avoid missing
EMI’s. 

Employment Status

For both salaried and
self-employed workers, employment status and job stability are key factors for
sanctioning a loan for almost all lenders. The number of years of association
with the organization and the salary being drawn monthly is assessed to
ascertain the borrower’s ability to repay the loan. If you are prone to
switching jobs frequently, the chances of your loan application getting
rejected are high as it leaves a negative impression on your financial
stability. 

Income Source

Closely related to
employment stability is income stability; a stable and sufficient source of
income is important for a lender to sanction an application. An applicant must
maintain a stable job/business to earn a stable monthly income, which
determines his ability to pay back the loan. On average, if the loan EMI
exceeds 60% of the monthly income of the borrower, the application is
rejected. 

Credit History

Credit scores show how
effectively a person has been repaying his existing loans and credit card
payments. A score of 700 and above is considered as a healthy credit score.
Most lending institutions look at an applicant’s credit score before
sanctioning a loan. Any late payments, cheque bounces, defaults in payments,
etc. reflect in your credit history and can impact your loan application. 

Property Documents

For availing a loan against property in India, property documents must be authentic and valid. Common documents related to a property include permissions, registrations, building plans, clearances, and so on. If the property is associated with any legal turfs or if any of the documents are not in order, the application is likely to get rejected. 

Income Tax Returns (ITR)

Despite having a stable job
and a high monthly salary, your loan application may get rejected due to
insufficient ITRs. An aptly filed ITR for the last 3-4 years ensures a steady
flow of income and increases the chances of your loan getting sanctioned. 

Property Insurance

Along with the
above-mentioned factors, the leveraged property must be insured as a
trust-building exercise. An insured property fosters a sense of security
against the property and increases the chances of loan sanction. 

Given that these following factors are taken care of, and one understands and respects the short term and long-term responsibilities associated with it, LAP is one of the easiest options to arrange for funds.  With interest rates starting at just 10.5%, Tata Capital offers easy loan processing, convenient EMI options, and low fees and charges for a loan against property. Contact today for more details!

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