As a general rule, secured loans comes with easy availability than collateral-free financing options for a simple reason that the lending risk is covered by the availability of asset security. A secured loan can either be complete financing or partial financing. In the case of the latter, the financing usually involves making self-financing up to a certain extent to raise the remaining amount as loan.
Under complete financing, however, one may receive the entire amount sought without needing to make any upfront payment. When it comes to these loan types, a property loan surfaces as a popular financing option. Given that the loan against property eligibility requirements are simple to meet, one may not find it to be much of a hassle to avail the necessary funding when needed.
Further, a few tips and tricks in place can uplift an individual’s overall eligibility for the advance as well, which can be useful to know. But before that, let us find out the basic eligibility requirements that you would need to meet to avail a property loan with ease.
Common Loan Against Property Eligibility Requirements
When availing a loan against property, you may be asked to meet the following criteria to be eligible to avail funding.
- You must be either a salaried or a self-employed individual.
- You must also be in the minimum and maximum age range based on your occupation. For salaried applicants, the age range usually lies between 23 and 65 years. For self-employed individuals though, it is a notch higher, lying between 21 and 70 years.
- If salaried, you must be employed with a private/public sector company or an MNC. Also, you must carry a minimum work experience of 6 months in the current job with a total work experience of not less than 1 year.
- For self-employed individuals, a minimum business vintage of 1 year is required for the current venture, with a total vintage of at least 3 years.
- Individuals must also have a minimum monthly income based on their city of residence.
- Further, a minimum property value is also required based on the city you reside in.
- At last, you must hold Indian citizenship with a residential stability in the country for at least a year.
While these were the common requirements, you may be needing to meet additional loan against property criteria based on the lending institution selected. It is thus advisable to prepare for these and check with your selected financial institution of any other eligibility requirements that may come around before applying for the loan.
Now, let’s delve into the various ways that can help improve one’s overall eligibility for the advance.
Ways to Improve Your Loan Against Property Eligibility
Check maximum loan availability and apply under it
The amount of loan against property you can avail at the maximum is largely based on your borrowing profile. You can check your maximum loan availability through the use of a property loan eligibility calculator by providing details like your age, income, city of residence, and the likes. It is, however, ideal to not stretch your financing capacity and secure the entire funding value available. Instead, you can choose to borrow only as much as needed to keep the repayment liability low. This can work in favour of your eligibility for the advance, allowing you to receive easy approval at favourable terms.
Work on your credit history and score
When availing collateral-based advances like property loan, one may end up ignoring their credit history and score as it does not fall under mandatory criteria for financing. However, lenders always run a check through the applicant’s credit history and score to determine the total risk involved in lending.
It is thus best to check your credit score and take necessary steps to improve. The history for a better record on your past borrowing behaviour so the loan availability is eased. Ideally, a score above 700 keeps the history clean and appreciable for the purpose of borrowing. Thus leading to improved loan against property ultimately.
Bring down credit dependency
Individuals often resort to availing loans, advances, or even use credit cards to meet their financing needs if such advances are easily available to them. While it sorts the immediate funding requirement, it is not an appreciable behaviour. As a borrower as it leaves ones income loaded with fixed liability claims monthly. As a result, this brings down the repayment capacity of the individual too, thus limiting new loan access.
Heavy credit dependency also serves as an indicator of unbalanced financing decisions on the individual’s part. Which lenders often look down upon, thus impacting the overall loan eligibility.
Avail a healthy mix of loans and advances
It is also advisable to avail a mix of loans and advances with a healthy balance. In this, you must take care to borrow loans better distributed as secured and unsecured advances to distribute the overall risk associated with them. This keeps the risk of repayment default or delay low too, thus enabling easy loan availability.
Apply with a financial institution you have existing relations with
Applying for a property loan with a financial institution you already hold relationship with makes it easy to avail financing. Although it may not improve the overall loan eligibility. It definitely simplifies loan availability as your previous financial records pre-exist with the lender. If you had already dealt in a loan or advance, and made timely repayments. The lender would have all of it stored in their database. They can simply pull out these records, examine your current financial status. And process the loan instead of going into lengthy background checks.
Taking all these steps can help with uplifting the overall loan against property eligibility for you. Thus bringing convenient loan availability to the fore. Keep all your loan documents arranged as these can typically simplify the total availability. For your through smooth loan processing and verification. It is also ideal to apply online when seeking quick financing as it simplifies. The entire loan processing through an elimination of redundant steps.