Pledging a property you own is one of the easiest and safest ways to secure a loan for your money needs. Be it for maintenance of your house or for further education, a loan against property can be of help even when every other option fails.
But to make sure the process of loan against your property is simple and fast, you should ideally keep a few things in mind that affects your eligibility. Let’s take a look at a few pointers that can help you make sure you are eligible for this loan offering.
- Keep your documents ready
You need to submit certain documents to the lender in order to prove your identity and eligibility. Keeping these documents handy will help in making sure your mortgage loan application process goes hassle-free. These documents may include your identity proof, address proof, PAN card and documents proving your employment such as bank statements, salary slip etc. You will also need to submit property documents to prove your ownership. If the property belongs to more than one person, you will need to submit copies of documents of both.
- Maintain a healthy credit score
Even when you are applying for a loan against property, your credit score plays an important role in deciding your eligibility. This is because your credit score and your credit report will reflect your lending and repayment habits. Lenders mostly give loans to individuals who are most likely to repay their loans in time. If your credit history has discrepancies, it could mean that you are likely to default on the loan. Even if you are allotted a loan in this scenario, you might have to pay a higher interest rate. Hence, if your credit score is not healthy, it is a wise idea to wait until you fix it before you apply for a loan against property. Keep in mind that a credit score of 750 and above is considered ideal.
- Your income and its source
Your loan against property eligibility is also highly dependent on your income and its source. The risk of default is a key element that lenders look for when considering your loan application. If you have a high income and can manage to pay back the EMIs comfortably, lenders will be more likely to approve your loan request. The source of income and your employment history may also be another factor here. For instance, if you are working in a reputed company, the lenders will see you as an applicant with less risk, and it can enhance your eligibility.
- Keep a check on other EMIs
As mentioned above, your ability to repay the loan back is a major criterion for lenders to approve your loan request. Despite of having a high income, lenders will see you as a high-risk applicant, if you already have a lot EMIs to pay back. This may affect your loan against property eligibility.
Go through the above pointers to enhance your chances of availing a loan against property. Consider using a loan against property EMI calculator to compute your loan EMIs and plan your finances accordingly.