Personal Loan Eligibility for Loans Against Property - Loan Trivia

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Tuesday, 21 May 2019

Personal Loan Eligibility for Loans Against Property

The Loan Against Property is essentially a personal loan which is secured in case of those who own properties in their names. These personal loans are provided as a fixed percentage of the value of the property. One of the major benefits of personal loans in this category is that you can secure them against your property and get necessary funding with minimum hassles. The application process is simpler and this makes it a smart decision indeed.
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Loans against property have several benefits arising from your sheer reliability and trust from the perspective of your lender and this helps you get more benefits and better services. Some of these advantages include the following:
  • High loan amounts can be garnered at attractive rates of interest and also for extended tenors
  • Swift approvals and hassle free application processing
  • Lower EMI values
  • A smart way to consolidate existing debt
  • Both residential and commercial properties are eligible
  • Funds can be used for both business and personal requirements
  • There may be options to choose from an EMI based loan/Overdraft facility

Here’s taking a look at the eligibility criteria for personal loan against property:
  • Minimum age of 21 years
  • Maximum age for self-employed individuals is 60 years and this is 70 years for salaried applicants
  • Property valuation
  • Any present liabilities
  • Current employment
  • Bank statement/passbook for last 6 months
  • Actual number of dependents
  • Last 6 months salary slips (for salaried borrowers)
  • Certified financial statements for last three years

The personal loan amount that you are eligible for is decided by the lender on the basis of a percentage value of the property that you own or also on your total income. You can use a personal loan eligibility calculator to work this out as well. In most cases, 65% of the total property value is the maximum that lenders offer for residential properties which are self-occupied while rented/vacant residential plots tend to have a maximum eligibility of 55% of their values.
In case of commercial properties, the personal loan eligibility is usually 50% of the total property value (self-occupied) and 40% (vacant/rented properties).  Most lenders follow these numbers though 5-10% may vary based on the policies of the financial institution in question.
If you are thinking about the benefits of Loans against Property Vs a home loans, the following aspects should interest you:

  • Loan against Property means availing of a personal loan of 40-60% against a property that is owned by you while Home loans are taken for buying new properties.
  • The end-usage of the funds is not restricted/monitored in case of Loans against Property while home loans are actively scrutinized for any wrongful usage of funds.
  • Loan against Property offers generally have slightly higher rates of interest in comparison to home loans.
  • Home loans are disbursed for pre-defined values, which are quoted to buyers while loan against property can have more dynamic values based on current real estate trends and market conditions.
  • Loan against property schemes usually have lower repayment tenors in comparison to home loans.

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