According to a report, there has been a 26% growth in the loan against property demand in the first quarter of 2021.
This growth can be attributed to the lower borrowing rates and favorable deals adhering to festivities.
However, individuals need to clear the loan against property eligibility criteria to make an application. The steps for the following have been discussed underneath.
How to Apply for a LAP?
Potential borrowers can follow the steps mentioned below to learn how to apply for a loan against property:
- Step 1: Visit a preferred lending institution’s website and select LAP from the product tab
- Step 2: Fill in the application form with the requisite details on the redirected page and submit
- Step 3: Individuals need to wait for a representative to get in touch regarding the procedure
- Step 4: An applicant has to submit valid documents after receiving a loan application approval.
If the submitted documents are valid and the applicant has cleared the loan against property eligibility criteria, many lending institutions disburse the amount to a borrower’s account within 72 hours.
LAP Eligibility Criteria
Potential loan against property borrowers must always check the eligibility criteria set by a lending institution beforehand. Ideally, these requirements are simple and easy to fulfill.
A lender assesses a borrower’s repayment capability and reliability before approving the application. The common requirements include:
For salaried individuals:
- An applicant must fall in the age bracket of 28 to 58 years
- He/she should be a residing Indian citizen
- Individuals should be working in a private, public or MNC for at least three years.
For self-employed applicants:
- They should maintain a steady income flow
- An applicant must fall in the age range of 25 to 70 years
- Individuals should have Indian residency.
Apart from the mentioned factors, individuals should also maintain a 750+ CIBIL score and good repayment practice to increase their LAP eligibility.
Since lenders scrutinise the documents and their validation before disbursing the amount, individuals should enquire about the list of documents needed to apply for a loan against property.
What are the Documents Needed for a Loan Against Property?
Some of the common papers that an applicant needs to submit are:
- KYC papers
- Salaried applicants must submit the salary slip and bank account statements of last three months
- Address and identity proof
- A self-employed applicant need to submit bank account statements of last six months
- IT tax returns
- Property papers
A lending institution may ask for additional documents depending on its regulations.
Apart from the loan against property eligibility criteria and documentation, individuals also need to consider the factors impacting the repayment structure. This will make borrowing lucrative and a smart way to make savings.
Lending institutions usually set an affordable loan against property interest rate due to its secured nature. However, this can vary from lender to lender.
Potential borrowers must compare lending institutions in the market and the interest and EMI terms offered. Opting for a lender who levies feasible repayment terms and doesn’t charge any additional fees is recommended.
This will reduce the repayment burden of a borrower and help his/her make healthy savings on disposable income.
Choosing the right tenor is again essential for a LAP borrower. Ideally, a long tenor will reduce the EMI burden but increase the interest outgo. While a short tenor reduces interest outgo significantly and helps make substantial savings on the borrowing.
Hence, it is crucial to evaluate one’s financial stability and choose a tenor accordingly. For instance, using a loan against property EMI calculator will show possible savings against a selected tenor. Based on the result, one can make an informed decision.
These are some valuable inputs on loan against property eligibility criteria and application process. Enquiring a lender about eligibility and documentation beforehand will again make the borrowing hassle-free.