Loan Against Property is a type of secured loan that allows individuals to borrow a significant amount of money against their property’s value. Before applying for the loan, it’s essential to know the eligibility criteria and collect all necessary documents required for loan against property.
The loan can be used for various purposes like buying a new property, expanding the business, funding higher education, or any other personal expenses. However, to get the loan approved, you need to meet certain eligibility criteria and provide all documentation to the lender.
Here is a checklist of documents required for loan against property:
1. Identity proof:
Any government-issued ID proof like Aadhar card, passport, voter ID card, or driving license can serve as your identity proof.
2. Address proof:
Documents such as electricity bill, water bill, gas bill, telephone bill, or rental agreement can be used as an address proof.
3. Property papers:
The most crucial document required for a loan against property is property papers. Any property that you want to pledge as collateral should be legally owned by you with clear titles in your name.
4. Income proof:
Lenders require borrowers to submit income proof to calculate their repayment capacity. Documents like salary slips, bank statements, or IT returns can serve as income proof.
5. Employment proof:
Lenders also ask for employment proof to assess the stability of the borrower’s income. An Employee ID Card, Bank Statements, or Form 16 can be used as employment proof.
6. Business proof:
If you’re self-employed, you need to provide the necessary business documents like GST registration, ITR, and bank statement to prove the stability of your business.
7. Property valuation report:
Before approving the loan, lenders assess the property’s current market value through an external valuator. You need to get a property valuation report from any registered valuator.
8. NOC from society:
If the property is situated in a gated community or society, you need a NOC (No Objection Certificate) from the society committee or local authority to mortgage the property.
9. CIBIL score report:
Lenders also check the borrower’s creditworthiness before approving the loan. You can get a CIBIL score report from the Credit Rating Agencies to evaluate the credit history of the borrower.
10. KYC documents of co-borrower:
If you’re applying for a joint loan, you need to submit the KYC documents of the co-borrower.
The above-mentioned documents are typically required by lenders for loan against property. However, the list may differ depending on the lender. Therefore, it’s advisable to check with the lender or visit their website to get an accurate list of the documents required for loan against property .
Apart from this, lenders also have certain eligibility criteria that borrowers need to meet to get the loan approved.
Here are the loan against property eligibility criteria:
1. Age limit:
Borrowers should be between 18-65 years of age to apply for a loan against property.
2. Property ownership:
The property should be legally owned by the borrower, with clear titles in their name.
3. Property type:
Only residential or commercial properties can be mortgaged to avail the loan.
4. Property value:
The property should have a minimum value specified by the lender, as the loan amount is directly proportional to the property’s value. Usually, lenders offer up to 70% of the property value as a loan.
5. Repayment capacity:
Borrowers should have a stable source of income to repay the loan.
6. Credit history:
The borrower’s credit history should be good to demonstrate their creditworthiness.
7. Loan repayment track record:
Lenders may also check the borrower’s track record of repaying previous loans.
Meeting the loan against property eligibility criteria and providing all the necessary documents is the first step towards getting the loan approved. However, before signing up for the loan, it’s essential to understand the terms and conditions, interest rates, and other charges levied by the lender.
Hopefully, this article has provided you with a comprehensive checklist of documents required for loan against property and loan against property eligibility criteria. For more information, you may visit https://www.smfgindiacredit.com/loan-against-property-documents-required.aspx, where we provide all necessary guidance and assistance for loan against property.