Over the last few years, borrowers are securing emergency financing by choosing appropriate financial instruments that enable them to utilise funds to meet various daily expenses. One such instrument is a loan against property where an applicant leverages the equity of his/her property to borrow funds against it. The funds received may be used for any purpose without any restrictions.
Owing to its features and benefits, the LAP market is estimated to reach USD 857.87 billion by the financial year 2026. Following is a handy guide that can help potential borrowers to manoeuvre various intricacies associated with a LAP.
Loan against property eligibility
Both salaried and self-employed individuals can secure a LAP upon fulfilling certain eligibility criteria. Meeting these criteria will enhance the chances of availing quick loan approval without any hassle.
Here are some eligibility factors borrowers must follow before applying for this loan –
- A salaried person should be working in an MNC or any other public or private sector company.
- Salaried borrowers from Pune, Delhi, Bengaluru, Hyderabad, Chennai, Mumbai, NCR, MMR or Ahmedabad can apply for this secured loan.
- On the other hand, self-employed individuals must maintain a steady income flow before making up their minds to go for a big-ticket loan like a loan against property.
- Borrowers belonging to the self-employed category must be property owners in Bengaluru, Pune, Mumbai, Indore, Madurai, Delhi, NCR, Jaipur, Hyderabad, Lucknow, Cochin, Surat, Vijayawada, Nagpur, Chennai or Ahmedabad.
In addition to this, one can check his/her eligibility online by using an online eligibility calculator. A borrower needs to feed the following information in this calculator to view the loan amount he or she is eligible to avail:
- Residence details
- Monthly income
- Value of a property
Therefore, using this loan against property calculator will fetch details regarding a loan amount depending on which one can settle for a particular lender.
Reputed financial institutions offer a high-value loan amount at affordable interest rates upon meeting the eligibility requirements.
Some of them also extend pre-approved offers to existing customers for a hassle-free transaction process. These offers are available on a myriad of financial products like a loan for property, home loan, etc. Borrowers can check their pre-approved offer by submitting their name and phone number.
Apart from these, individuals must factor in the importance of the loan documentation process.
Documents required for a loan against property
The application process for LAP mandates minimal paperwork. Here are the basic documents one needs to furnish while applying:
- Identity and address proof like Aadhaar, electricity bill etc.
- Employment proof. A self-employed applicant must present business ownership documents like a partnership agreement or registration certificate.
- Income proof like bank account statements, salary slips, ITRs. Self-employed individuals may provide their balance sheet and profit and loss statements prior to application.
However, an individual opting for a loan against property without income proof will need to give valid reasons and settle for a lower LTV ratio.
- Documents related to the property about to be mortgaged.
After submitting these documents, lenders will verify them and disburse the loan amount.
LAP application procedure
Upon checking the loan details and the EMI outgo, one can apply for a LAP online by following few simple steps:
Step 1 – Fill up the online application form by entering personal details.
Step 2 – Provide income details to fetch the best deal.
Step 3 – Submit the application after proper verification.
An agent will get in touch with the applicant after some time for further processing.
Finally, there are different types of a loan against property based on property type, employment and user requirements. Borrowers must weigh in these factors along with the aforementioned points to make an appropriate choice that proves to be beneficial for them in the long run.