Loan Against Property is a type of secured loan availed against a Commercial or Residential property kept as a collateral with the lender. It can be availed for any purpose, as there are no documentary evidence required for the end use of the funds.
|Age||21 - 58 years||23 - 65 years|
|Current work experience||1 years||1 years|
|Total work experience||2 years||3 years|
|Minimum Net Income||Rs.15,000-25,000 (monthly)||-|
|Minimum Profit After Tax||-||Rs.1-2 lakh (annual)|
Apart from the above criteria, applicants, current obligations, credit score will also be evaluated to determine the eligibility.
|Identity Proof||Aadhar Card / Passport / Driving License / Voters ID / PAN Card (any one)|
Residence Proof: Owned
Address proof submitted should match with the one you entered in the application.
|Latest electricity bill copy (not more than 3 months old )/ Passport / Driving License|
|Residence Proof: Rental||Registered rent agreement along with latest electricity bill copy|
|Property Documents:||Chain of Property agreement, Property tax receipt for 2 years, OC copy & Society registration certificate, Copy of Approved Plan, Share certificate copy|
|Proof of Income||Latest 6 months’ salary slips.
Latest 6 Months' Bank Statement. (Where salary is credited)
Last 2 Years' Form 16
|Latest 1 Year's Bank Statement. (Where income is credited), Last 2 Years' Income Tax (IT) Return (Audited), Last 3 Years' CA certified computation of income, P&L and Balance sheet in ITR|
|Proof of Business||-||latest electricity bill copy, registered rent agreement, Proof of Continuity of Business, Education qualification certificate and proof of business existence|
|Other Documents||Repayment track record for existing loans for last 12 months|
|Photographs||2 Passport size coloured photographs|
*Above is the checklist of documents required by the Loan lenders
Loan Against Property serves different purposes for individuals as well as businesses. The various benefits of Loan against property is as follows:
Being a secured loan, the rate of interest for loan against property are comparatively lower. This results in lower EMIs, making it easy for the borrower to address other financial needs without straining his/her budget.
Loan against Property generally comes with longer repayment tenure. This eventually brings down the EMI, thereby facilitating repayment and easing the burden on the borrower.
A Loan Against Property helps the borrower to unlock the dormant potential of the asset. The borrower continues to own and use the property, while availing funds for the same.
A Loan against property being a secured loan, gives you the freedom to use funds as per your requirement. It comes with higher loan amount and tenure, that makes it possible to fulfill the long term goals.
Most banks offer 50-90% LAP based on the property’s market value. It is always advisable to borrow an amount that you can repay conveniently. As per the experts, you should keep your monthly EMI for Loan Against Property between 60- 65% of your total income. Having high monthly instalments can eat a major portion of your income and you might have to compromise on some important financial goals like your retirement plan, child’s education, etc.
It is important to read and understand the loan’s fine print carefully, no matter how long it is. Look out the charges for late payment penalties, foreclosure, processing charges, administration and other additional charges that are associated with your loan. Don’t sign the document until and unless you completely understand it.
Loans against property do not come with any tax benefits in the manner of home loans which have benefits up to Rs. 1.5 lakh on principal repayment and up to Rs. 2 lakh on interest repayments annually
Defaulting on or delaying your loan EMIs can land you in trouble. You will not only be charged penalties for non-payment, but irregular repayment can bring your credit score down, reducing your chances of getting a loan in future. It is advised to repay your loan in a disciplined way as any late payment or default will reflect in your credit record.
Your credit score will reveal your creditworthiness, repayment history, and your current debts. Before approving your loan, lender do a bureau check which reflects your score and credit history. A low credit score will reject a loan application and thereby will further impact your current credit score. So, it is recommended to do credit check on your profile before applying.
Choose your lender with care. Get best interest rates & avoid unnecessary hassle by choosing reputable Lender.
Financial institutions charge nominal fees to process each application. Always pay attention to all fees charged to ensure that no hidden charges are levied.
As you look for a low interest rate, make sure you weigh the pros and cons of each option to make the right choice.
Go though the entire offer document, Read all the terms and conditions carefully and make an informed decision.
Limit what you Borrow. Make sure your monthly installment payment is affordable and does not disturb your routine Budget.
You might end up paying more interest with Low credit score (less than 750). A good score helps you grab the best Personal Loan deal.