Know the Eligibility Criteria to Avail a Loan Against Property
Moving out of a rented place to a personal one is a dream that every individual cherishes. Whether an apartment or a house, living under a roof that is completely free from any ownership constrictions, provides the satisfaction that exceeds all boundaries. For doing so, one needs ample funds, and that’s where a mortgage loan comes in. Banks and NBFCs offer mortgage loans with minimal documentation required. Once an applicant meets all the basic eligibility criteria, the loan is processed within as fast as 72 hours.
Most NBFCs provides mortgage loan of up to Rs.1 Crore to salaried individuals and up to Rs.3.5 Crore to self-employed ones. For the salaried, they have a loan tenure of 2 to 20 years and for the self-employed, it ranges up to 18 years.
It is advisable to check the mortgage loan and Loan Against Property Interest Rates and eligibility before submitting the documents in order to avoid rejections.
For availing a Loan Against Property from banks and NBFCs, one needs to fulfil specific eligibility criteria, details of which are provided below:
For the salaried
Salaried individuals need to conform to the following eligibility:
- Age
Applicants need to be within 33 to 55 years of age.
- Employment
This loan against property eligibility entails that individuals need to be employed with a private or government enterprise.
- Income tax returns
Income Tax returns show that the applicant abides by all legal and lawful matters. This helps banks and NBFCs in ensuring that an individual doesn’t default on his/her loan.
For the self-employed
Self-employed individuals need to conform to the following mortgage eligibility:
- Age
Self-employed individuals need to be within the age groups of 25 to 70 years.
Certified Business
Applicants need to have a certified business. For this, they must hold any of the following mortgage documents:
- SEBI Registration Certificate
- SSI Registration Certificate
- Memorandum of Association (MOA) (for companies)
- Partnership Deed (for firms)
- Factory Registration Certificate
- Export-Import Code Certificate
- Trade License Certificate
- ROC Registration
They can also hold a Degree Certificate (for professionals) or a Professional Qualification Certificate.
Income Tax Returns
The individual should have paid Income Tax returns for his/her business for at least 2 financial years and show the details of the same to the lender.
ITR aids lenders to calculate the Fixed Obligations to Income Ratio (FOIR) of the individual.
By calculating FOIR, a financial institution will learn whether all the existing credits of an applicant are within 50% of his/her income. Upon its calculation, they would determine the amount that the applicant can be sanctioned.
The financial institution will sanction the amount to the borrower which he/she can repay within the due time.
In addition to the above loan against property eligibility, both salaried and self-employed individuals need to fulfil few criteria regarding their property:
- The property up for the mortgage should not be a collateral for other such loans.
- One cannot avail a mortgage loan for an accommodation that he/ she pays rent for or is owned by a third party.
- Individuals can avail a mortgage loan on commercial properties and empty/unused plots.
Banks and NBFCs provide mortgages for a property that is under construction also. In this case, they may disburse the loan in instalments for which the applicant only needs to pay the interest. Also read about Things To Consider Before Applying For A Loan Against Property for a better processing and easier approval.
The regular payment of EMI that includes the principal and interest will only start after the full amount is disbursed by the lender.
Following the loan against property eligibility criteria mentioned above, a salaried or self-employed person can quickly get their dream house constructed or even choose to purchase an apartment.
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Category: Debt
