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A loan against property is a type of secure loan where borrowers pledge their property as collateral to avail of funds against it. Proper budgeting and repayment planning not only completely ease the burden of loan repayment but also allow borrowers to leverage a property they own for gains.
The demand for property loans has also witnessed a significant hike in recent years and not surprisingly thus lenders have become quite strict about borrowers meeting all loan against property eligibility requirements. Loan applicants who meet these eligibility requirements get approved for a loan.
Let us walk the readers of this article through the loan against property eligibility requirements to help them be better prepared for their loan against property application journey.
Loan Against Property: Eligibility Requirements for Salaried and Self-Employed Individuals
1. The applicant, whether salaried or self-employed, must be a residing citizen of India.
2. They must be between 25 and 85 years of age. Age requirements change from lender to lender. So, it is always a good idea to talk to a representative of the lender you are applying to and get clarity on their age requirement for loans against property.
3. The loan applicant must have a stable job and business. Further, they must have a stable income, high enough to allow them to comfortably repay the loan EMIs they wish to avail themselves of.
4. The loan applicant must have a CIBIL score of 750 or above. Some lenders also sanction loans to loan applicants in the range of 700 to 750. However, it is always a good idea to maintain one’s CIBIL score above 750 when planning to apply for a high loan value loan such as a loan against property.
5. The loan applicant must have all the property papers in their name. If the property has more than one owner, loan applications are considered only if they are signed by all co-owners.
Meeting your lender’s loan against property eligibility requirements is important. If you do not meet any of the qualifying criteria, there is a very high chance that your loan application will get rejected, which in turn, will negatively affect your chances of availing of any other loans in the future.
Further, if you are planning to apply for a loan against property, do everything in your power to make yourself eligible for the lowest mortgage loan interest rates. In the case of high loan value and long-tenor loans, even a small difference in the interest rate can reduce one’s total interest payout and the cost of borrowing the loan by a significant margin. Availing yourself of low property loan interest rates is not as difficult. Maintaining an excellent CIBIL score and a low debt-to-income ratio will certainly help; so will keeping the loan-to-value ratio low.
Pledging collateral with high resale value will also give you high negotiating power and the ability to demand your lender for the lowest mortgage loan interest rates possible. Individuals repaying a loan against property can consider opting for a loan against property balance transfer if they find another lender willing to refinance their loan at a lower interest rate. However, loans against property balance transfers must be opted for after giving the decision proper thought.
Conclusion
Loans against property are a popular loan option these days. Low interest rates, flexible repayment tenors, substantial loan amounts and tax benefits have been adding to the popularity of these loans. If you are planning to apply for a property loan, make sure you meet your lender’s eligibility requirements. This will help you get approved quickly as well as avail of the loan on the most beneficial loan terms and conditions.
