Mitigating a short-term financial crisis or achieving the next financial milestone is now very easy by taking a loan. Financial institutions have made loan products readily available for eligible customers, and the entire application can be made online. There are two types of loans that you can choose from when it comes to short-term financial requirements. One is an unsecured loan, such as a personal loan. You don’t need to keep any collateral for this type of loan, and hence, it is called an unsecured loan. On the other hand, secured loans, such loan against property is a loan agreement where you have to keep an asset as collateral.
Since it is a secured loan, a loan against property has a lower interest rate and can be repaid in a longer duration of time. Loan against property eligibility norms are also not that much complicated, and if the papers are found in order, the loan can be approved very quickly. Whether it is for personal purposes or a home renovation loan, loans against property eligibility requirements are generally the same. In this article, we will discuss loan against property eligibility factors.
Various Factors that Affect Loan against Property Eligibility
The eligibility criteria for loan against property are slightly different for salaried people as compared to self-employed customers. We will discuss both of them one by one.
Salaried Individual
Age: The age of the customer should be between 33 and 58 years.
The customer should be a salaried employee in an MNC, a private company, or a public sector company.
The customer should be a resident of India.
Self-Employed Individuals
Age: the age should be between 25 and 70 years.
Self-employed with a regular stream of income for a particular duration
The customer should be a resident of India
The various documents that are required to be submitted for approval are:
Salaried Individuals
Latest Salary Slips
3 Moths’ bank account statements
PAN
Aadhaar Card
Proof of Address
Papers of the property to be kept as collateral (stating clear ownership)
Self-Employed
6 Months’ bank account statement
PAN
Aadhaar Card
Proof of Address
Papers of the property to be kept as collateral (stating clear ownership)
Essential Things to Keep in Mind while Applying for a Loan Against Property
Whether it is a home renovation loan or a loan against property, there are certain things that you have to keep in mind.
1. Interest Rate: Make sure to go for a financial institution that offers the best interest rate on a loan. Even a tiny difference in the interest rate can cause a substantial change in the amount of interest to be paid.
2. Charges: Ensure that the processing fee and miscellaneous charges do not accumulate to become too large. Do read into the fine prints to know the kind of deal that you are getting.
Conclusion
A loan against property is one of the best ways to raise capital at a low-interest rate. Make sure to check the loan against the property eligibility criteria mentioned above before you apply for the loan. This will ensure a smooth application process and a higher chance of approval.
