Taking a loan against property provides you with a lump sum amount that might help you to meet several financial emergencies. However, getting a loan against a property is not as simple it looks. One needs to complete several formalities, along with submitting various documents to have the loan sanctioned. However, doing all this does not guarantee the lender institution would grant a loan against the property pledged. Instead, several factors might affect your loan against property application.
Age
Age is one of the most critical factors that determine your loan against property eligibility. Such loans are not granted to individuals at the age of sixty or above. Thus, if you are 55 years of age and your loan tenure is five years or more, you are not eligible for it. The reasons for having an age gap for a loan against property are many.
Sixty is the age of retirement, and individuals tend to lose a continuous flow of income. Under such circumstances, it is difficult for them to repay the loan. Hence, one cannot access a loan against property beyond the mentioned age.
Income
Getting a loan against property sanctioned depends on your monthly income. Most financial institutions prefer granting a loan to individuals who have a fixed income. Thus, people working in the corporate sector or as Government employees are given the loan faster.
Individuals working in the unorganized sector are also granted a loan against the property if the EMI exceeds 60% of the person’s monthly income. In such cases, the borrower institution might decline your loan application. Thus, one should regularly have a fixed and sufficient flow of income to get a loan against property sanctioned.
Business profile
A person’s job profile plays a crucial role in determining his loan sanction. For instance, individuals with a fixed job and salary are granted a loan against property faster than those associated with the unorganized sector. Remember, you might earn the same, but the former is always preferred due to their job consistency.
Credit score
Credit score refers to your history of repaying loans and debts in the market. Every lender institution checks the borrower’s credit score before granting him a loan while they apply for it. You should have a high credit score to ease the process of loan sanction. If you fail to repay your debts within the stipulated time, the lending institution might refuse to give you a loan against the property.
Property documents
As the name suggests, a loan against property solely depends on the property you own, its value, and other factors. Thus, having original property documents is crucial. The property documents should have sufficient proof that you are the owner of the property. If you have joint property, you need to undergo several other formalities before applying for the loan.
Conclusion
The factors mentioned above play a decisive role in your loan sanction. They also determine the time taken for sanctioning the loan. However, following these generally ensures a hassle-free loan application and granting procedure.
