You can use the money from a loan against property to fund your child’s education, capitalise on a business opportunity, or finance a wedding in the family and pay the amount back comfortably as the tenor extends up to a period of 20 years. Each lender has their own set of criteria and you should pay attention to this aspect while scouting lenders. You can secure a better rate of interest and a high amount by increasing your loan against property eligibility.
So take a look at 5 of the best ways to improve your loan against property eligibility.
Ensure you have the Documents to Prove your Eligibility
As per the general terms and conditions of the loan it is important for you to have all the necessary documents like your address proof, latest salary slips or income proof for the past 6 months, bank statements, PAN card, Aadhaar card, copy of mortgage documents, and your IT returns so that you can prove your loan against property eligibility. In addition to this you must be a resident of India aged between 33 and 58 years if you are a salaried individual in an MNC, private company, or public sector company, and aged between 25 and 70 years if you are self-employed and have regular income. Moreover, if you have existing obligations try to clear them to boost your chances of loan approval.
Maintain a Good Credit Score
Your credit score displays your history with regards to credit, your capacity to repay a loan, and number of existing debts you have. Thus it plays a significant role in determining your ability to get a sanction. Moreover, basis this report your lender is likely to decide the amount they will sanction to you. Apart from the loan amount it also affects the rate of interest at which the lender offers you a sanction. Showcasing a score of 750 or more will make you an ideal candidate and allow you to borrow more at possibly a lower rate of interest.
Pledge the Right Kind of Property
When seeking this loan you can pledge a residential or commercial property. But it is important to remember that apartments with tenants for more than 5 years without a regular renewal of rent agreement will not be accepted as pledged property. Similarly, properties with structural flaws or illegal constructions will also not be accepted as collateral. So keep this in mind before putting a property up as collateral. Abiding by the stipulations will help you make the most of what the loan has to offer.
Display all Sources of Income
If you have multiple stable sources of income, disclose all. This is because lenders may think that given your existing debt and just your salary you don’t have the capacity to repay the loan against property. However, when you disclose all your sources of income it is likely that they will have more faith in your repayment abilities.
Borrow Only as much as you Need
When pledging a property to increase your eligibility, don’t borrow more than 55% to 60% of the value of the establishment. Borrowing funds as per your needs will help you stay within your budget. Additionally, the lender will be more confident of your repayment abilities which isn’t the case if you request an exorbitant amount.
Besides this, having a good debt to income ratio shows lenders that you are not scraping by each month using your credit card and that you can make financially mature decisions. This is important when you have to make consistent contributions towards servicing your loan against property EMIs.
To know the exact EMI payable on your loan against property use online tools such as the loan against property EMI calculator from a trusted financial institution like Bajaj Finserv. When you take Loan Against Property from Bajaj Finserv note that you can enjoy a competitive interest rate, the comfortable tenor of up to 20 years and a loan amount of up to ₹3.5 crore to meet all your financial commitments with ease. Moreover, to simplify and speed up the process of raising finance, you can check your pre-approved offer-from Bajaj Finservand use it to apply.