A loan against property is the most secure way to raise a vast amount of money in a short period. The property you pledge as security can be a residential or commercial building or, even, a piece of land.
The best part of LAP is that you remain the owner of the pledged asset even after the loan is sanctioned. The amount you borrow from the lending institution depends upon the current value of the property in the market. Furthermore, these types of loans are available on comparatively lower interest and are repayable over a longer duration than other loans.
The money borrowed does not have to be used for a specific purpose and can be utilized to start up a new business or grow an already existing one. In case you’re eager to know who can apply for it, you can know more about the loan against property eligibility criteria below:
Eligibility Criteria for LAP
- Salaried individuals must have a working experience of 3 years.
- Self-employed individuals must have a business that is more than five years old and has filed ITR for more than three years.
While the majority of the people are aware of the tax benefits on loan against property, you should know what the other advantages of applying for it are. Keep reading to know more!
Advantages Of Loan Against Property
Large Loan Amount
The loan amount received from the lending institution can be quite massive depending upon your employment status. You can get up to Rs.1 crore as a loan if you’re a salaried professional and up to Rs.3.5 crore if you are a self-employed individual.
The loan doesn’t require too much documentation, which drastically reduces the loan-processing duration.
Longer Repayment Duration
LAPs offer the option to reduce the EMI amount and pay the loan over a more extended period to make the repayment process easier for you. Salaried individuals can pay back loans in 2-20 years, while a self-employed individual may do the same in 2-18 years.
While having all the genuine documents would make the loan application process much more comfortable, here are the things you must know if you want to apply for a loan against property without income proof.
How to apply for a loan against property without proof of income?
Have a Co-applicant
You can apply for the loan with your brother, sister, mother, father, spouse or anyone with a steady salary and valid income proof.
Have a Valid Reason
You can in no way justify not having an income proof or an ITR filing history. You need to understand that these are two fundamental aspects when it comes to lending institutions and similar services. However, if you have a valid reason, you may be permitted to apply for the loan.
Have a Conversation with the Manager
You need to have a conversation with an authorized person or the manager and convince them about your ability to pay back the EMIs on time. It would help if you promised them that you’d make the payments on time without any fail.
Results of numerous researches show that almost 15-20 million people don’t have a bank account in India. However, this doesn’t mean they should not have access to the various services offered by the lending institutions. Therefore, it is often found that lending institutions and moneylenders provide loan against property to such individuals after they pledge a genuinely valuable property as security.
So, the next time you need a large amount of money for something significant, you should think about applying for a loan against property.