What are Some Essential Documentation for Securing a Loan Against Property
Loan against property is a popular financing option that individuals can avail by mortgaging their property with a lender. As the loan is secured against the property, the rate of interest on loan against property is comparatively lower than other personal loans, making it an attractive financing option for people.
However, before getting a loan against property, there are several documents that an individual has to provide to the lender. These documents prove the eligibility of an individual for availing the loan and also help the lender in assessing the risk involved in lending money. In this article, we will discuss the documents required for loan against property in detail.
Documents Required for Loan Against Property
Here are the documents required for loan against property:
- Application Form: The first and foremost loan against property document required is the application form. The form should be duly filled and signed by the applicant and co-applicant (if any). It should contain all the necessary details such as personal, professional, and property-related information.
- Identity Proof: The applicant has to provide any one of the following documents as identity proof:
– Aadhaar card
– PAN card
– Voter ID card
– Driving license
– Passport
The identity proof should be valid and not expired. It is mandatory to provide an identity proof for loan against property.
- Address Proof: The applicant has to provide any one of the following documents as address proof:
– Aadhaar card
– Passport
– Voter ID card
– Driving license
– Utility bill (electricity, water, gas, telephone) not older than 3 months
The address proof should be valid and not expired. It is mandatory to provide an address proof for loan against property.
- Property Papers: As loan against property is a secured loan, the property related documents are crucial. The applicant has to provide the following documents related to the property:
– Proof of ownership (Sale deed, Title deed)
– Encumbrance certificate (to ensure that the property is free from any legal disputes)
– Property tax receipt and electricity bill (to ensure that the property is not in default)
– Building approval plan (to ensure that the construction is legal)
- Income Proof: The applicant has to provide the following documents as income proof:
– Salary slips (for salaried individuals)
– Income tax returns (for self-employed individuals)
– Bank statements (last 6 months)
– Balance sheet and profit & loss statement (for businesses)
The income proof helps the lender in assessing the repayment capacity of the applicant/co-applicant.
- Employment Proof: The applicant has to provide the following documents as employment proof:
– Appointment letter
– Experience certificate
– Company ID card
– Business registration certificate (for business owners)
The employment proof helps the lender in assessing the stability of the applicant/co-applicant’s job/business.
- Guarantor Details: In some cases, the lender may ask for a guarantor to support the loan application. In such cases, the applicant has to provide the following documents related to the guarantor:
– ID proof
– Address proof
– Income proof
– Employment proof
The guarantor should be a resident of India and should not have any outstanding loans.
What is the Loan Against Property Eligibility
After discussing the documents needed for loan against property, it is important to understand the loan against property eligibility criteria. In general, the eligibility criteria for loan against property is as follows:
– The minimum age of the individual should be 21 years
– The maximum age of the individual should be 60 years (for salaried individuals) and 65 years (for self-employed individuals) at the time of loan maturity
– The individual should be a resident of India
– The individual should own a self-occupied or a rented out residential or commercial property
– The property should be free from any legal disputes, should have clear titles, and should be in the name of the applicant or co-applicant
Loan Against Property Rate of Interest Lowest range:
The lowest interest rate on loan against property depends on various factors such as the loan amount, the property value, the repayment tenure, and the credit score of the applicant/co-applicant. Currently, the rate of interest on loan against property ranges from 9% to 12% per annum. It is always advisable to compare the rates offered by different lenders before finalizing the loan.
In conclusion, loan against property is a great financing option for individuals who own a property and need money for various reasons such as business expansion, home renovation, education, etc. However, before availing the loan, it is important to understand the eligibility criteria and the documents required for loan against property. Providing accurate and genuine documents helps in faster processing of the loan application and approval. So, always double check the documents before submitting them to the lender.
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