Meeting considerable expenditures like the cost of international education, home renovation, wedding or medical expenses may extremely be challenging. In such a scenario, your credit card might not be adequate for mitigating such expenses. In such a financial crisis, your asset holding like your home or property may come in handy. You can easily place an application for a loan against property from lenders like HDFC LAP, SBI LAP, BOB LAP, ICICI LAP, BOI LAP, to name a few. So, you can get a huge loan fund by pledging your piece of land or property or home. This specific kind of loan is also addressed as a mortgage loan.
LAP or loan against property or mortgage credit option is a kind of secured credit option that you can opt for by offering your property or asset as collateral or security. Your property stays with the bank lender as collateral till the loan proceeds are repaid in entirety. The rate of interest offered on such secured credit options is generally lower than the rates of unsecured credit options as the lender has lower credit risk due to the availability of collateral.
Here, in this blog you will understand the mortgage loan concept. It will even endow you with a good idea about the loan application procedure and required documents that you must keep handy for your loan against property application.
What’s a loan against property?
As suggested by the name, a loan against property infers a loan that can be availed by putting up your property or home as collateral or security for the loan approval. Assets that you can pledge include your land, home or commercial space.
Availing a loan against property options may prove to be extremely advantageous. It is a very simple and convenient way of making funds available when you require it. A loan against property permits you to take a loan of an increased proceeds for a longer time-period, thus providing convenience and great ease in loan repayment.
Also Check: SBI LAP
What are the important benefits and features of loan against property options that you must be well-versed with?
∙ Most banks provide loans against property at a very competitive rate of interest so that you can realise your dream in a hassle-free manner.
∙ Flexible loan repayment tenure with highest repayment tenure equalling 15 years.
∙ Maximum loan proceeds you can get in metro locations i.e., Rs 10 crore, urban locations Rs 5 crore and in semi urban locations Rs 3 crore.
∙ You get the choice to deposit your surplus funds and save on your interest constituents.
∙ Opting for the loan against property option is a great way to increase your property utilisation.
∙ Banks even provide a balance transfer option, which permits you to transfer all your prevailing loan from your prevailing bank in a seamless manner at a lower rate of interest.
What’s the eligibility for loan against property option?
Before you learn regarding the distinct documents required for the loan approval, let’s first understand more the crucial eligibility parameters for loan against property option.
∙ You must be the rightful home or property owner offering this security or collateral for a loan.
∙ Minimum age required must be at least 21 years.
∙ You must be self employed or salaried earning a stable or regular income.
∙ Minimum GAI or gross annual income must be Rs 3 lakh.
∙ You as an applicant must be a salaried or professional, business individual, self-employed, agriculturist or others. And must be employed or engaged in this profession or business for at least 3 years.
What are the crucial documents required for the loan against property option?
Here’s a list of crucial documents you must ensure to keep handy when placing an application for the loan against property deal.
The required bank loan documents for the salaried individuals are –
∙ A copy of duly filled out application form.
∙ Identity documents – Aadhaar card, PAN card, voter ID, driving license or passport.
∙ Address proof of both your office and residence – voter ID, Aadhaar card, a copy of the electricity bill or utility bill.
∙ A copy for the previous three years bank statement or form 16.
∙ Salary slips for the current 3 months.
∙ Bank statements of the previous 6 month showing your income obtained.
∙ Ownership proof – original property, property’s title deed offered as collateral or security and other property documents as asked by the lender. These may include the water tax, latest maintenance, municipal tax and other taxes receipt.
∙ Non-encumbrance letter from the co-op society.
∙ Permission to form equitable mortgage from the society or development authorities (whenever this is applicable).
What are the documents required for the loan against property approval if applied by the self-employed individual?
∙ A copy of the filled-out application form.
∙ Proof of identity – Aadhaar card and PAN card.
∙ Proof of address – office and residence, Aadhaar card, driving license, voter ID, copy of utility bills.
∙ Income returns filing of past 3 years.
∙ Income certificate that is issued by the recognised authority such as BDO, Tehsildar and SDO.
∙ Bank account statements of the previous 6 months.
∙ Ownership proof – original property deed of property.
∙ Receipt of utility payments like water tax, maintenance taxes, municipal taxes, etc.
∙ No objection letter from housing society for mortgage.
∙ Non encumbrance letter by the housing society.
How you must apply for the loan against property deal?
Applying for the loan against property deal with the lender is simple. All you must do is make sure that your documents for the loan against property application are thoroughly accurate and in the right place.
Follow the mentioned steps to place an application for the loan against property deal –
∙ Fill out the loan application form very carefully and attach your 2 current passport size photos.
∙ Attach all the requested documents.
∙ Submit the filled-out form and the documents at the nearby branch of the bank from where you want the loan against property to start your application process.
Note that, if you can opt for the loan against property option, then this is the best option you can opt for because of its secured nature, it requires you to meet a lower rate of interest on the loan.