Loan against property

A very common type of loan is the loan against property which best described as a loan which is disbursed by the lender after mortgaging any of property of the borrower. Here the borrower gives a guarantee to the lender and this type of loan comes under the secured loan. The loan amount is decided by evaluating the value of the mortgaged property and its current value in which 40-60% of the total value is disbursed as the amount of loan. All of us need cash in one or another form, any certain or uncertain situation of time and any kind of movable and immovable property can be used to turn into cash. The loan against property provides the opportunity to the borrower to lend any of their property or asset as collateral and raise the fund for their requirement. The Loan against property usually holds a very low rate of interest due to the fact that property is already mortgaged to the lender as a guarantee but with a long tenure to repay.

Types of Loan against property

In the market, there are five types of loan against property available which can be availed by the borrower. As per the need, one can avail the type which they want to apply for and they are:

• Loan against rented residential property
• Loan against self-occupied commercial property
• Loan against vacant residential property
• Loan against rented commercial property
• Loan against industrial property

Eligibility Criteria for Loan against Property

There were two friends Rahul and Raj and both of them had applied for the loan against property. But, Rahul was unable to enjoy the loan facilities, on the other hand, Raj has successfully qualified the eligibility criteria and avail the loan and fulfill his dreams and desires. The borrower need to qualify the eligibility criteria in order to disburse the loan. Let us discuss the criteria which need to be qualified:

• Age Factor
• Income
• Cost evaluation of mortgaged property
• Banking activities
• Residence Proof

Age Factor Age plays a crucial role here. If you are salaried employee your age should not be more than 60 years and if the applicant is self-employed the age should not cross more than 65 here. The minimum age is 21 years. Income of the applicant is evaluated by the lenders before providing the loan. They need to calculate what is the income of the applicant, risk in the market where he/she works, from how many years applicant is working, expense record of applicant etc. Cost evaluation of mortgaged property. The expert from the bank will evaluate the mortgaged property, the place value where it is located, and the documents of the property before committing to the applicant. Banking activities are considered as a prime factor while deciding the eligibility. Applicant’s past track record of account, account’s average limit, credit score etc factors are considered before taking any further step. Residence Proof The applicant should be Indian resident and must provide with valid address proof like the Adhaar card, PAN Card, Passport etc in order to avail the loan.

Documents Required for Loan against Property

The documents required by different banks are different but we would like to share some common requirements which are asked by every bank.

• Address Proof
• Age Identity
• Identity Proof with 3 passport size photograph
• KYC documents from bank
• Past 6 months bank statement
• Copy of ownership of the mortgaged property
• Salary slips by the company
• If businessman, continuity of the business from past 5 years
• The required documents like tax returns, p/l account etc.